Abbey joins race for the 'mass affluent'

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The Independent Online

Abbey National became the latest high street institution to pursue the newly identified "mass affluent" market yesterday, when it launched Inscape, a portfolio management service for people with more than £50,000 to invest.

Abbey National became the latest high street institution to pursue the newly identified "mass affluent" market yesterday, when it launched Inscape, a portfolio management service for people with more than £50,000 to invest.

Abbey estimates there are more than four million such people with those kind of liquid assets, and it forecasts that this group, the "new wealthy," is set to rise fast, because of economic growth and low inflation.

The launch comes hard on the heels of Alliance & Leicester's announcement on Monday that it will be launching its own internet-based wealth management service for the mass affluent early next year.

Institutions define the "mass affluent" as a new category of people who traditionally do not think of themselves as "rich" but perhaps unknowingly have relatively sizeable funds to invest. The fashionable idea is that they provide a potentially higher margin business than providing financial services to the entire mass market.

Earlier this year HSBC and Merrill Lynch launched a £1bn joint venture to provide global online banking and investment services to people with at least $100,000 to invest. The two institutions reckon there are about 10 million people around the world who fall into that category. They also forecast that global economic growth and rising internet usage will increase this figure to 15 million people in a few years.

Last week Credit Suisse unveiled a Web portal targeted at savers with at least £30,000 in liquid assets to invest. Halifax is launching a private bank next year using its majority-owned life assurance subsidiary, St James's Place Capital. Looking further upmarket, the fund manager Schroders announced on Monday that it is expanding its new pan-European private bank, which requires liquid assets of at least £250,000.

Inscape will provide customers with advice on how to plan their portfolio, and will then invest their money in a range of different funds managed by institutions such as Goldman Sachs and Merrill Lynch. It will charge an annual portfolio management fee of £100 plus 1 per cent of the customer's funds, as well as a 1 per cent fund management charge.

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