Segregated mandates predicted to swell to £180bn in two years

By Katie Marriner

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Feb 20, 2018

The market for wealth manager and discretionary fund manager segregated mandates is predicted to more than double to £180bn in the next two years, which will further force transparency on investment fees, according to research from consultancy NextWealth.

Currently, wealth manager segregated mandates account for around £86bn in assets, which NextWealth says represents approximately 12 per cent of retail assets under management.

NextWealth, a consultancy set up by former Platforum head Heather Hopkins, says the companies that will benefit the most from growth in the segregated mandates market are asset managers who have scale in the market and “who get the relationship with wealth managers and DFMs right”.

NextWealth also suggests that wealth managers and DFMs will profit from growth of segregated mandates and that they may pass more of the cost-savings to investors given increased pressure from regulators to disclose fund fees.

The whitepaper says: “This increased disclosure will have a ripple effect to the rest of the retail market. Asset managers will be pressured to offer funds at lower charges to investors who buy through smaller IFAs and other channels.

Segregated mandates are a written agreement with a fund manager on how the client wants their investments to be managed. The mandate means the money is kept separate from other investments and operated under any other requirements set out in the mandate.

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