The South-west breaks down into two parts – the prosperous cities and towns of Bristol, Bath, Cheltenham and Exeter and the relatively poor, rural areas, including Cornwall, often with high levels of unemployment, that surround them.
Bristol will be the location for the Money Marketing IFA UK Exhibition and Conference, which will be held at the Bristol Marriott Hotel on October 11.
The spread of IFAs mirrors the make-up of the area, with a high concentration of the bigger, often investment-based, IFAs in the towns, including names such as Hargreaves Lansdown and Chase de Vere. The outlying areas are served by smaller pension brokers, typically members of networks such as DBS and Countrywide, although Burns Anderson has its base there.
According to Hargreaves Lansdown chief executive Peter Hargreaves, this is no more than a coincidence and he certainly does not think it reflects any particular local needs. Unlike others who practise in the area, Hargreaves does not regard the area as particularly prosperous or especially fertile ground for IFA prospecting.
The same rationale of the South-west just being a “nice place in which to live” and being geographically handy for much of the country is mentioned by many of the IFAs. This has meant that many businesses, including financial services firms, have relocated to the South-west or at least have outposts there.
Second, the inherent attractiveness of the area has long meant that swathes of people have migrated from all over the country to retire there, with many of the towns becoming, in essence, retirement communities.
The first accounts for an influx of professionals, which no doubt has had an impact on house prices, most notably in Bristol's Clifton area in particular. Whether this translates in to wealthy IFA clients is open to debate, with some practitioners suggesting it means that many have their entire investment tied up in an enormous mortgage. Others, such as Falcon Group chief executive Allan Rosengren, see the density of IFAs in the area as a reflection of the local wealth and need for advice.
The presence of such a large community of retired persons does also have a slightly ambiguous impact on the local IFA market. While at first sight it would seem perfect IFA territory, many local practitioners say many of the retired people living in the South West have moved from elsewhere in the country and have maintained their relationships with the IFAs that advised them before they moved.
All the bigger firms are keen to state that they market themselves nationally and the work they carry out is spread right over the country. The clustering of IFAs in the area has been beneficial, according to Hargreaves, who says that often the best place to set up business is where there is competition.
The smaller brokers in the more rural areas report that as a consequence of the underlying poverty of the area, having capital is for many clients a relative novelty, which is reflected in a very cautious risk-averse attitudes. Philip Milton, managing director of Barnstaple's Philip J Milton & Company, says geographical remoteness has the benefit of allowing a critical distance and avoidance of peer pressure. He cites the technology bubble as one example.
As a whole, IFAs in the South-west do not see any great changes on the horizon, other than a steady increase in wealth of the area's inhabitants.
Average prices of semi-detached houses
|City of Bristol||£122,599|
|Bath and NE Somerset||£141,455|