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Outsider triumphs in Isa selling race

Autif&#39s decision to release details of its members&#39 Isa funds under

management has come as a bit of a surprise – not least to some of the fund

managers.

Having gone to great lengths to conceal Isa sales due to their

“commercially sensitive” nature, several fund managers may be less than

happy that their rivals will now have relatively up-to-date data on how

they are faring.

M&G and Invesco both claimed to be unable to even provide an estimate of

their 2001 Isa season sales until after their company&#39s results had been

published. Now, they face the choice of having their figures made public

once a month or taking a stand against the trade body.

The rankings themselves are already causing confusion. The surprise

first-placed Isa manager, Scottish Widows, is reported to have well over

£2bn in Isa funds. This breaks down into £524m through IFAs and

Widows&#39 tied salesforce and another £1.64bn through the Lloyds TSB

network.

This makes its bank Isa sales almost double those of Barclays while

putting the group as a whole more than £500m ahead of second-placed

Fidelity. It is clear that Widows has been quietly dominating the Isa sales

market.

Scottish Widows senior manager of IFA marketing Ellen Crabtree says: “We

have 2,500 branches in the Lloyds TSB branch network. With that kind of

penetration, it is inevitable we will do well.”

Three other banks – Abbey National, Barclays and HSBC – also make it into

the top 10, leading one national newspaper to suggest that banks are

gaining ground on the pure fund managers.

Yet three investment houses – Fidelity, Jupiter and Invesco Perpetual –

account for well over 20 per cent of the entire Isa market.

Schroders director Robin Stoakley says: “If you look at the top 10, you

have got four pure fund managers in there. I do not think you can conclude

that banks are now taking more business. I think the pure fund management

industry is looking very healthy.”

Threadneedle communications director Richard Eats says: “We have all been

slightly surprised that the banks have never come to get us in the same way

they have in other European countries. But Barclays and HSBC have done

around the same amount of business as us, with thousands of branches to

serve them.”

Eats believes the figures illustrate the power of the IFA market in the

UK. He says: “The people who are wealthier have never gone to the banks and

have always gone to seek independent advice.”

With the exception of Widows, the figures do not carry many surprises.

However, a few household names have come out punching below their weight

while some of the smaller houses have produced surprisingly high sales.

Schroders, the second-biggest overall fund manager in the UK, comes in at

34th in the table. However, Stoakley is quick to point out that the figures

do not include investment trust Isas or fund supermarket sales, both of

which have accounted for a reasonable proportion of the firm&#39s Isa sales

over the past year.

Other big names which have not done so well in the Isa market are

36th-placed Merrill Lynch Investment Managers and 43rd-placed Deutsche

Asset Management.

The figures will be a bigger blow to MLIM which spent a considerable

amount – with little effect – on an Isa season ad campaign to promote its

Global Titans and UK Dynamic funds.

Of the smaller houses, ABN Amro in 23rd and Artemis in 40th place have

been the most successful, with £308m and £102m respectively in

Isa funds under management.

From the IFA and consumer point of view, Autif&#39s decision to publish Isa

figures will be seen as a positive move in the direction of greater

transparency in the industry. However, there is a possibility that the move

will make providers more defensive and lead to the withdrawal of such data.

Fund data providers such as Morningstar, Standard & Poor&#39s and Lipper say

they already all face varying degrees of co-operation from providers when

gathering fund performance statistics and portfolio information.

Nevertheless, Lipper product manager Nick Hamilton believes fund managers

are generally becoming more relaxed about releasing information. He says:

“There has been a shift from a position where fund groups were less willing

to provide information to a position where they are now more willing.

“But they are very sensitive about how it is distributed. They are willing

to provide it to us for our portfolio analysis service because they trust

us.”

Most disappointed by new Isa figures is Fidelity. Having thought it had

the UK market sewn up, it has been hit with the harsh reality that it is

some £0.5bn off the top spot and it has plenty of work left to do.

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