03 September 2007

The Rise of the 'Instividual'

Barclays Wealth in partnership with the Economist Intelligence Unit and Ledbury Research

As the number and assets of the wealthy in the UK continues to break new records, this paper examines the current climate of giving amongst this group, what issues the individuals and the charities face, and how this is set to change in the next decade.

The numbers of online investors diversifying their investments away from equities has increased over the last twelve months. Whilst some have become more cautious and reluctant to trade, a significant proportion are also trading more regularly in order to take advantage of opportunities as high-quality securities have been sold indiscriminately which now potentially offer great value.

Just a few years ago individual investors could only dream about having the same resources available to them as professional traders working for financial institutions. However, the landscape has quickly transformed and technology, products and services have developed at such pace that private investors are fast catching up with the professionals.

'Instividual' is a term that has been used for a number of years in the US to describe this growing trend, particularly in the family office space where individuals have sufficient financial resources to merit the same institutional level of service as endowment and pension funds.

With institutional mandates in the region of £50 million and four or five required to gain appropriate diversification, an 'instividual' would require some £200-£250 million in investable assets. However, new developments in technology and broker offerings are bringing about a democratisation of the services which were once only available to financial institutions.

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