Schroders Plc · LSE:SDR
Schroders — Investor Presentation (June 2024)
38 slides from Schroders's investor presentation, June 2024
Slide 1: Schroders UK Financial Adviser Pulse Survey
Schroders UK Financial Adviser Pulse Survey June 2024 For professional investors only. Not for retail clients
Slide 2: Schroders UK Financial Adviser Pulse Survey May 2024
Schroders UK Financial Adviser Pulse Survey May 2024 Twice yearly survey Conducted Completed by of financial advisers online between 276 Series started in 25 April and advisers from 2014 8 May 2024 across the UK Source: Schroders Financial Adviser Pulse Survey May 2024. 1
Slide 3: How advisers' clients are feeling about their investments
How advisers’ clients are feeling about their investments
Slide 4: How would you describe the sentiment among most of your clients?
How would you describe the sentiment among most of your clients? Client sentiment 100% – 41% of advisers say their clients 90% are now bullish – an increase from 17% in November 2023, with a 80% corresponding and significant 70% decrease in those who are bearish 60% – This is the strongest balance o
Slide 5: Client concerns
Which of the following factors do you think clients are most concerned about in the current environment? Ranked in order from 1–4 Client concerns Capital loss Inflation 80% 80% – Clients remain most concerned 63% 60% 59% 70% 70% about losing capital. 47% rank this 53% 49% 60% 60% 47% as their number
Slide 6: Long-term investing vs. cash deposits conversations
Given current interest rates, are you having conversations with clients about long-term Long-term investing investing vs. cash deposits? vs. cash 100% 10% 5% 10% – Instant access savings accounts 90% offer the prospect of real returns 80% with inflation beating rates 70% – 90% of advisers are having
Slide 7: Clients holding cash and reluctant to invest
Which of the following applies to your clients who may have been holding cash over the past Long-term investing couple of years and were reluctant to invest vs. cash – 49% of advisers say that clients 9% who have been holding cash over the past couple of years and were reluctant to invest are now mo
Slide 8: Client enquiries about a potential change in government
Have any clients enquired about the impact a potential change in government could have on their finances? The UK election – As the Labour Party continues to hold a strong lead in national polls, 74% of advisers say that 26% they have been asked by clients about the impact a potential change in gover
Slide 9: Market trends
Schroders Market trends
Slide 10: Market expectations over the next 5 years
How would you expect the following to trend over the next 5 years? Market expectations 100% – The proportion of advisers who 90% expect equity market returns to 80% be higher than historical averages over the next five years has risen 62% 70% 60% 57% 56% 56% 60% to 28% 49% 48% 47% 46% 45% 45% 41% 50
Slide 11: Economic expectations over the next 5 years
How would you expect the following to trend over the next 5 years? Economic expectations 100% – Global growth expectations for 85% 90% the next five years have risen 80% 80% 79% again, with 69% of advisers 75% 75% 74% 80% 72% 69% expecting higher global growth 69% 65% 63% 70% 58% 58% 53% 60% 52% – 5
Slide 12: Disruption related to technological advances and the environment
How would you expect the following to trend over the next 5 years? Disruption related to 100% technological advances 90% and the environment 76% 80% 72% – Most advisers continue to expect 71% 68% 70% a good deal of disruption over the 62% next five years due to tech 57% 57% 56% 53% 60% 57% 55% advan
Slide 13: Geopolitical disruption and deglobalisation
How would you expect the following to trend over the next 5 years? Geopolitical disruption 100% and deglobalisation 90% – The percentage of advisers who 80% expect considerable disruption 73% due to geopolitics over the next 69% 69% 63% 70% five years has risen to 73%. This 62% 60% 57% 60% has been
Slide 14: The impact of the cost of living crisis
The impact of the cost of living crisis
Slide 15: Clients adjusting plans due to the cost-of-living crisis
What proportion of your clients have adjusted their plans due to the cost-of-living crisis? Cost-of-living crisis 80% – 90% of advisers report that some 70% 67% of their clients have adjusted their 65% 62% plans as a result of the cost-of- 60% living crisis 50% – However, the proportion of advisers
Slide 16: Reasons clients gave for adjusting their plans
What reasons have clients given for adjusting their plans? Cost-of-living crisis Primary reason cited 50% 45% – 36% of advisers cited higher 45% household expenses as the main 40% 36% reason why clients have adjusted 35% their plans 30% 25% 21% – This was followed by increased 20% 20% 18% mortgage p
Slide 17: Sustainability
Schroders Sustainability
Slide 18: Trend in clients seeking sustainable solutions
What trend have you observed in clients seeking sustainable solutions in recent months? Sustainable investing 70% – In May 2024, 26% of advisers 60% reported a decrease in clients 60% 55% 53% seeking sustainable solutions 48% while only 18% reported an 50% 46% increase 39% 40% – The proportion of ad
Slide 19: Factors impacting client appetite for sustainable solutions
Do you think the following factors have had an impact on client appetite for sustainable solutions? Client appetite for 100% sustainable investing 90% – A significant 74% of advisers 26% 80% 39% believe that increased scepticism 52% is impacting client appetite for 70% sustainable solutions 60% 50%
Slide 20: Adviser confidence talking about sustainable investing
Rate your level of confidence about talking to clients with consistency about the terminology, regulation, integration and behavioural implications of sustainable investing on a scale of Sustainable investing 1 (very low) to 5 (very high) 60% – Over the past year, advisers, on 52% balance, have beco
Slide 21: SDR labelling
Do you feel prepared for the introduction of the SDR labelling in relation to sustainable investing? SDR labelling – Half of advisers do not feel prepared for the introduction of SDR labelling – Firms can begin to use labels with accompanying disclosures on 31 July 2024, and the naming 50% 50% and m
Slide 22: Sustainability investment label with broadest client appeal
Which sustainability investment label do you think will have broadest appeal to your clients? SDR labelling 35% 33% – Advisers expect that sustainability impact and sustainability focus 30% funds will have most appeal to their clients, when they are 25% introduced 22% 21% 20% – However, the majority
Slide 23: Consumer Duty and other regulation
Consumer Duty and other regulation
Slide 24: Impact of Consumer Duty on your business
What impact do you think Consumer Duty will have on your business? (with 1 being low and 5 being high) Consumer Duty 45% 42% – The Consumer Duty came into 40% 38% effect in July 2023 and 39% of 35% advisers now think that the Duty 35% will have a high or reasonably high impact on their business, 30%
Slide 25: Consumer Duty and increased outsourcing
Will the introduction of Consumer Duty lead to increased outsourcing of all or some of your investment proposition? Consumer Duty – A third of advisers think that the Consumer Duty will lead to them increasing outsourcing of all or some of their investment 33% proposition 67% Yes No Source: Schroder
Slide 26: Priorities for ongoing implementation of Consumer Duty
What are the priorities for your business for the ongoing implementation of Consumer Duty? Consumer Duty November 2023 60% 50% 35% – The ongoing assessment of fair 40% 32% 22% 27% 23% 26% 28% value using client feedback 16% 13% 16% 20% 9% remains the main priority for the 0% greatest proportion of a
Slide 27: Fair value outcome and pressure on ongoing charging models
Do you feel that the fair value outcome will put pressure on ongoing charging models? Consumer Duty 80% – 63% of advisers think that the fair 70% 69% value outcome of the Consumer 63% Duty will put pressure on ongoing 60% 59% charging models, up from 59% a year ago 50% 41% 40% 37% 31% 30% 20% 10% 0%
Slide 28: Share of client base categorised as vulnerable
Over the last year what percentage of your client base did you categorise as being vulnerable? Vulnerable clients 70% – 36% of advisers categorise more 63% than 10% of their clients as being 60% vulnerable 50% – 9% of advisers categorise more than 25% of their clients as being 40% vulnerable 30% 27%
Slide 29: Recommending the British ISA
Will you consider recommending the British ISA if this becomes available? The British ISA – 80% of advisers will consider recommending the British ISA if it is introduced 20% 80% Yes No Source: Schroders Financial Adviser Pulse Survey May 2024. 28
Slide 30: Advice guidance proposals and new propositions
Have the advice guidance proposals prompted you to consider a new proposition for some of Advice guidance your clients or for new clients? proposals – 45% of advisers have been prompted to consider a new proposition as a result of the advice guidance proposals 45% 55% Yes No Source: Schroders Financ
Slide 31: Support to manage the change in the Lifetime Allowance
Have you been given enough support/ information to manage the change in the Change in the Lifetime Allowance? Lifetime Allowance – A significant minority of advisers (24%) feel that they have not been 24% given enough support/ information to manage the change in the Lifetime Allowance 76% Yes No Sou
Slide 32: Client base affected by the Lifetime Allowance change
What proportion of your client base has been affected by the change in the Lifetime Allowance? Change in the 80% Lifetime Allowance 74% – 92% of advisers have some clients 70% that have been affected by the change in the Lifetime Allowance 60% 50% – 15% of advisers say that over ¼ of their client ba
Slide 33: FCA thematic review of Retirement Income Advice
Has the recent FCA thematic review of Retirement Income Advice prompted you to FCA thematic review review your retirement income proposition? of Retirement Income – 1/3 of advisers have reviewed their retirement income proposition as a result of the FCA thematic review of Retirement 33% Income Advic
Slide 34: Areas considered in reviewing retirement income proposition
If you have reviewed your retirement income proposition, which of the following have you FCA thematic review considered? of Retirement Income 45% 41% 39% – The advisers who have reviewed 40% 38% their retirement income 35% proposition have considered a 35% range of aspects 30% 26% 25% – The ongoing
Slide 35: AI
Schroders Al
Slide 36: AI technology: opportunity or threat to your business?
Do you think the development of AI technology applications such as ChatGPT represents an opportunity or threat to your business? AI 100% – The proportion of advisers who 90% 24% think that the development of AI 30% technology applications such as 80% 43% ChatGPT represents an 70% opportunity rather
Slide 37: How soon would you incorporate AI in your advice process?
How soon would you anticipate incorporating AI based technology applications in your advice process in some way? AI 60% 56% – 85% of advisers anticipate 51% incorporating AI based 50% technology applications in their 43% advice process in some way in the future 40% – 19% of advisers expect AI to be
Slide 38: Important information
Important information 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 r