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Digital and financial planning to underpin Investec W&I's strategic developments in the year ahead
19/05/2017 , Ian Orton

Enhancing its digital offering for private clients along with the development and expansion of its financial planning capability are major strategic objectives for the next financial year at Investec Wealth & Investment (W&I), according to a question and answer interview with Steve Elliott, its global head, that formed part Investec’s 2017 results presentation.

“The development of our digital capability will continue to be a principal strategic theme,” he said. “The launch of Click & Invest is a key component of this, and achieving the delivery of this new service to the market will be a significant point of focus for the business.”

Mr Elliott said that Click and Invest, an initiative primarily targeted at self-directed customers, had made good progress during the past year and had achieved a number of important milestones.

“The final stages of development are now being undertaken as we prepare for the forthcoming launch of this new digital service,” he added.

Click and Invest is not the sole focus of digital developments at W&I, however.

“We are committed to developing digital enhancements to our core investment offering and make these available to those clients of the core business for whom they are suited,” Mr Elliott continued.

“The development and expansion of the UK business’ financial planning capability remains an important part of our strategy and an aspect of our service that we continue to build as the complexity of the financial world continues to increase,” he said.

Investec’s full year presentation also provided additional financial details about the W&I division as well as segmented details about its asset gathering and asset management activities.

Despite an 8.8 percent increase in the division’s operating profits and a 20.5 percent in funds under management during the year, a key earnings driver, the operating margin fell marginally from 26.4 percent to 25.9 percent.

The pre-tax return on tangible equity increased, however, from 30.7 percent to 35.7 percent.

The presentation doesn’t provide segmented income or balance sheet data to analyse the performance of the UK and South African businesses in this respect. But it does provide segmented data on asset flows and assets under management.

“UK and Other” accounted for £35.56 billion of W&I’s £54.78 billion of assets under management, or 64.91 percent of the total.

Investec Wealth & Investment Limited (UK) accounted to £31.67 billion, or 57.81 percent of the total with “Other”, i.e. its European and Asian operations accounting for the remaining £3.69 billion, or 6.73 percent of the total.

Discretionary assets with Investec W&I (UK) amounted to £25.39 billion, a 20.2 percent increase on the £21.12 billion recorded in the previous. Non-discretionary assets amounted to £6.47 billion, an 8.2 percent increase on th £5.99 billion reported for 2016.

In overall terms the UK appears to have been a relative laggard in terms of growth relative to Europe, Asia and South Africa.

“Other” increased its assets under management by 38.5 percent from £2.66 billion to £2.75 billion. South Africa recorded a 22.5 percent growth in assets under management from £15.69 billion to £19.22 billion.

But the UK grew assets under management by just 17.5 percent from £27.11 to £31.87 billion.  

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