Royal Bank of Scotland will today launch a significant push into retail fund management, as it looks to become one of the biggest players in a £40bn market.
The part-nationalised bank is to target the popular "cautious managed" and "balanced managed" funds following criticism that the existing vehicles are too volatile and potentially risky.
Investment Management Association (IMA) data reveals there is more than £40bn of UK retail investor money in these funds, making up just over 7 per cent of the country's total retail fund investments.
Previously, RBS has offered retail funds run by Aviva. The bank believes it is a good time to enter the market itself after it carried out research finding that 2.6 million people were looking to increase their investments in the stock market and these funds were popular. The IMA figures show that of the 31 fund sectors, "balanced" was the fourth best seller and "cautious" was seventh.
Zak de Mariveles, managing director of structured investor products at RBS, said the group hoped to be among the top 10 fund managers in the next three years, chasing assets of £500m. "It is a major push into the managed funds space," he said, adding that the sums currently invested in these funds in the UK "is likely to increase dramatically as investors look to protect their savings".
RBS said it had found that a third of independent financial advisers would not recommend the funds on offer at the moment, and pledged to cap risk.