The French Financial Advice Market 2007: Industry Research Report

The French Financial Advice Market 2007

Published Date: February 2007

Published By: Datamonitor

Page Count: 51

Order Code: R313-21090

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EXECUTIVE SUMMARY: Market Structure; Regulatory Developments; Competitor dynamics; Opportunities
CHAPTER 1 INTRODUCTION
What is this report about?
Who is the target reader?
How to use this report
CHAPTER 2 MARKET STRUCTURE
Introduction
Key findings
The financial advisory distribution channel in France is one of the smallest in Europe
Financial advisors have struggled to establish their own market niche
There are currently only around 1,300 active advisors in France
France is home to just 0.8% of the total European financial intermediary community
Compared to Europe as a whole, the French channel is dominated by single-tied advisors
Over 95% of financial advisors in France are compensated on a commission-basis at some level
Banks are the most important channel for distribution of financial services products in the French market
France is the biggest bancassurance market in Europe
Bancassurance in France has evolved into a sophisticated channel
The French life and pensions market has experienced strong growth since 2005, but banks have swallowed most of the benefits
Less than 10% of life and pensions distribution in France goes through independent channels
Banks retain a firm grip on sales of mutual funds
Customer loyalty makes entry difficult
CHAPTER 3 REGULATORY DEVELOPMENTS
Introduction
Key findings
There is no main body regulating the French financial services industry
The financial advice market is largely unregulated
New legislation was introduced in 2004 aimed specifically at financial advisors
The European Commission has introduced a number of regulatory reforms affecting the financial advice distribution channel in France in recent years
The Financial Services Action Plan
Insurance Mediation Directive
UCITS III
Markets in Financial Instruments Directive (MiFID)
MiFID regulation is likely to have a profound impact on the French financial advice channel
The European Commission suggests a regulary 'pause' over the next five years
EC simplification project is likely to affect the insurance industry across Europe
The financial services industry in France is tired of regulation
Trade association membership in France is fragmented
....However, the FECIF takes a leading role in regulatory dissemination and implementation
CHAPTER 4 COMPETITOR DYNAMICS
Introduction
Key findings
The financial advice market in France is dominated by banks
Out of those firms which present a separate financial advice offering, the market is dominated by four main firms
Cardif: The largest provider in France
Generali: Holds over 4% of the financial advice market
AXA: 35% of products distributed through independent advisors
Skandia: Works exclusively with independent advisors
M&A activity amongst independent and intermediary firms is growing
CHAPTER 5 OPPORTUNITIES
Introduction
Key findings
France is a market characterised by a dominant banking sector creating limited opportunities for new entrants to leverage financial advisor distribution
Firms looking into the French market should concentrate on the opportunities provided by private pensions and wealth management
Life product sales are controlled by the banking sector
Retail bank asset managers often fulfil the role of financial advisor for mutual fund distribution
An growing affluent sector may stimulate the advice channel
Private pensions have the most potential for long-term growth
Partnerships may be a more efficient entry strategy than acquisitions
Regulation may create a more favorable environment for financial advisors in France
The key to the development of the financial advice channel could be the legislation on appropriate charging structures
APPENDIX
Supplementary data
Definitions
Research methodology
Further reading
Savings & Investments SPP
Interactive Databases
Reports
Briefs
Global Wealth Service SPP
Interactive Databases
Market Reports
Strategic Insight Reports
Wealth Management Competitor Tracker
Datamonitor Asia Pacific Wealth Management SPP
Life and Pensions SPP
Interactive Databases
Reports and Briefs
Financial Advice Market SPP
SPP writing team
List of Tables

Table 1: Distribution of financial intermediaries and their customer base in France, 2005
Table 2: Distribution of European financial advisors, 2005
Table 3: European Intermediaries split by channel, 2005
Table 4: Overview of the French pensions industry in 2005
Table 5: Membership of intermediary trade associations in France
Table 6: The top four financial advice distributors in France, 2005
Table 7: AXA sales split by distribution channel, based on gross written premiums in 2005
Table 8: Skandia unit-linked life products growth 2004-05
Table 9: Intermediaries in France, 2005
Table 10: European intermediaries remunerated on a purely fee-basis
List of Figures

Figure 1: Single-tied advisors dominate the French advisory distribution channel
Figure 2: Single-tied advisors dominate the French advisory distribution channel
Figure 3: The UK has the greatest number of advisors remunerated on a purely fee-basis
Figure 4: Retail banks control a relatively small share of mutual fund distribution in France
Figure 5: Generali has a large number of subsidiaries in France providing products to its distribution network

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