Schroders Plc · LSE:SDR
Schroders — Investor Presentation (May 2023)
32 slides from Schroders's investor presentation, May 2023
Slide 1: Schroders UK Financial Adviser Pulse Survey
Schroders Schroders UK Financial Adviser Pulse Survey May 2023 For professional investors only. Not for retail clients
Slide 2: Schroders UK Adviser Pulse Survey May 2023
Schroders UK Adviser Pulse Survey May 2023 Completed by Advisers from 180 advisers >150 firms Schroders Annual survey of Schroders’ UK adviser clients Series started in 2014 Conducted online between 2 May and 16 May 2023 Source: Schroders May 2023 1
Slide 3: How are clients feeling about their investments?
Schroders How are clients feeling about their investments?
Slide 4: 44% of advisers' clients remain bearish although sentiment has improved
60% 53% 49% 49% 48% 47% 50% 45% ‒ 44% of advisers’ clients remain 45% 44% bearish although sentiment has 41% 41% 41% 40% 38% 40% improved somewhat from our last 35% 31% two surveys (68% were bearish in November 2022 and 57% in May 30% 26% 2022) ‒ 44% are now neutral (up from 19% 20% 26% in November
Slide 5: 53% of advisers rank capital loss as their clients' greatest concern
Capital loss Inflation 80% 80% 63% 60% 70% 70% 53% 49% 60% 60% ‒ While most advisers report that 43% 40% 50% 50% capital loss remains the biggest 32% 30% 29% 40% 40% 26% 23% concern for their clients, concerns 20% 20% 30% 30% 18% 15% 13% 12% 11% 11% 20% 20% about inflation are also coming to 8% 7% 7
Slide 6: 90% of advisers are discussing long-term investing against cash deposits
10% ‒ 90% of advisers are currently having conversations with their clients about the merits of long- term investing against cash deposits 90% Yes No Source: Schroders Adviser Survey May 2023. 5
Slide 7: 89% of advisers have clients who have adjusted their plans
70% 66% 60% 50% ‒ 89% of advisers have some clients who have adjusted their plans as 40% a result of the cost-of-living crisis ‒ 25% report that more than 25% of 30% their clients have adjusted their plans 20% 18% ‒ 66% report that between 1 and 25% of their clients have adjusted 11% their plans 10%
Slide 8: 60% of advisers' clients cited higher household expenses for changing plans
70% 60% 60% 50% 44% ‒ 60% of advisers’ clients have cited 40% 37% higher household expenses as a reason for changing their plans 30% 25% ‒ 44% of advisers’ clients have cited 20% helping wider family as a reason 13% 10% 0% None of the above Increased mortgage Pension considerations Helping wider fam
Slide 9: Market trends
Schroders Market trends
Slide 10: 31% of advisers expect equity market returns lower than historical averages
70% 62% 60% 57% 56% 56% 60% 49% 48% 47% 46% 45% 45% 50% 41% ‒ 31% of advisers expect equity 39% 39% 40% market returns to be lower than 34% 32% historical averages over the next 5 31% 30% years against 17% who expect to see 26% 30% 22% higher returns 21% 20% 19% 19% 18% 17% 17% 20% ‒ On balance, adv
Slide 11: 80% of advisers expect inflation to trend lower over five years
85% 90% 80% 80% 79% 75% 75% 80% 65% 70% 63% ‒ 80% of advisers expect that 58% 58% 60% inflation will trend lower over the 49% 49% next five years and 63% expect 47% 46% 46% 45% 50% that interest rates will do likewise 40% 39% 38% 37% 40% ‒ Only 6% expect higher inflation 32% 30% 30% and 7% higher in
Slide 12: Advisers expect disruption to remain a major theme in markets
76% 80% 72% 71% 68% 70% 62% 57% 57% 56% 60% 53% 46% - Advisers expect that disruption 45% 50% 41% will remain a major theme in 40% markets 34% 30% 30% - 53% expect higher levels of disruption related to changes in 20% the environment, including climate change, little changed 10% from November 6% 4%
Slide 13: Sustainability
Schroders Sustainability
Slide 14: 52% of advisers rate their confidence on sustainable investing as middling
60% 52% 50% ‒ 52% of advisers rate their 42% 42% confidence about talking to clients 40% 37% with consistency about the terminology, regulation, 30% 29% 30% integration and behavioural 25% 25% 24% implications of sustainable investing as middling 17% 17% 20% 14% ‒ The percentage of advisers who 12%
Slide 15: 32% of advisers have seen more clients asking for sustainable investments
70% 60% 60% 55% 50% 48% ‒ 32% of advisers have seen an 39% increase in the number of clients 40% asking for sustainable investment 31% options over the past 12 months, 30% down from 51% in November 23% 2022 20% 15% ‒ The number of advisers reporting 9% a fall in the number of clients 10% 8% 4% askin
Slide 16: Performance challenges the biggest factor impacting client appetite
60% 49% 50% 40% 37% ‒ Advisers believe performance challenges have been the biggest factor impacting client appetite 30% 27% for sustainable solutions over the last 12 months 20% 19% 10% 6% 0% No change in client Other factors Pressure on finances Increased Performance appetite for due to the rising
Slide 17: Private market investments
Schroders Private market investments
Slide 18: 21% of advisers are considering private market investments
100% 90% 80% 70% ‒ 21% of advisers are considering using private market investments 60% with their clients up from 12% in May 2022 50% 89% 87% 40% 79% 30% 20% 10% 21% 12% 13% 0% May-22 Nov-22 May-23 Yes No Source: Schroders Adviser Survey May 2023. Figures do not sum to 100 due to rounding. 17
Slide 19: Multi-asset investing
Schroders Multi-asset investing
Slide 20: 86% would recommend a fully active multi-asset fund
14% ‒ When asked which fund they would be more likely to recommend if they had equivalent charges, a fully active multi-asset fund with a robust, proven investment process or a passive multi-asset fund, 86% selected the active fund 86% Fully active multi-asset fund Passive multi-asset fund Source: S
Slide 21: Crypto assets
Schroders Crypto assets
Slide 22: 68% of advisers concerned about young people investing in crypto
32% ‒ 68% of advisers say they are concerned about young people investing in crypto and digital assets 68% Yes No Source: Schroders Adviser Survey May 2023. 21
Slide 23: 32% of advisers not equipped to discuss crypto and digital assets
6% 32% ‒ 32% of advisers say that they are not equipped at all to have discussions with clients on crypto and digital assets. 62% say they are adequately equipped while only 6% say they are well equipped 62% Not equipped at all Adequately equipped Well equipped Source: Schroders Adviser Survey May 2
Slide 24: Consumer Duty
Schroders Consumer Duty
Slide 25: 19% of advisers say they are fully prepared for Consumer Duty
4% 19% ‒ 19% of advisers say they are fully prepared for Consumer Duty and 77% say that their preparations are in progress and that they should be ready for the end of July ‒ However, 4% say that they have not yet stated to prepare 77% Fully prepared Preparations in progress and should be ready for
Slide 26: 39% think Consumer Duty will have an impact towards the lower end
40% 38% 35% 30% ‒ 39% of advisers think that Consumer Duty will have an 25% 24% impact towards the lower end of the scale 20% 18% 15% ‒ 25% of advisers think it will have 15% an impact towards the higher end 10% 7% 5% 0% 1 (low) 2 3 4 5 (high) May-23 Source: Schroders Adviser Survey May 2023. 25
Slide 27: 59% think fair value outcome will pressure ongoing charging models
‒ 59% of advisers think the fair value outcome in the Consumer duty will put pressure on ongoing 41% charging models 59% Yes No Source: Schroders Adviser Survey May 2023. 26
Slide 28: 25% think Consumer Duty will increase outsourcing
25% ‒ 25% of advisers think that the introduction of Consumer Duty will lead to increased outsourcing of all or some of their investment proposition 75% Yes No Source: Schroders Adviser Survey May 2023. 27
Slide 29: AI
Schroders Al
Slide 30: 57% think AI applications such as ChatGPT are an opportunity
‒ 57% of advisers think the development of AI technology applications such as ChatGPT 43% represents a potential opportunity for their business while 43% see it as a potential threat 57% Threat Opportunity Source: Schroders Adviser Survey May 2023. 29
Slide 31: 73% anticipate incorporating AI applications in their advice process
50% 45% 43% 40% ‒ 73% of advisers anticipate 35% incorporating AI based technology applications in their 30% 27% advice process in some way in the future 25% 22% ‒ 43% expect this to happen two to 20% five years from now 15% 10% 8% 5% 0% 1 year 2-5 years 6-10 years Never Source: Schroders Adviser Su
Slide 32: Marketing material for professional clients only
Marketing material for professional clients only. Past performance is not a guide to future performance and may not be repeated. The value of investments and the income from them may go down as well as up and investors may not get back the amount originally invested. Exchange rate changes may cause