Inscape attracts only 2,000 customers

Abbey National's wealth management division has had a slow start

Abbey National's wealth management division Inscape has attracted only 2,000 customers even though it opened for business eight months ago.

The low take-up rate could also have implications for other banks who are switching resources into specialised services for wealthy customers.

The figure was revealed by Abbey National's chief executive Ian Harley in an interview with BBC News Online on Wednesday.

Inscape has had a slow start - I think because of the uncertainty in the equity markets, in particular, so customer acquisition has been slower than we had liked

Ian Harley, chief executive of Abbey National

Inscape was launched last November and the number of people it has signed up are way below its own projections.

Inscape, is one of a growing breed of specialised wealth management services that are aiming to tap into the "mass affluent" market.

The "mass affluent" are loosely defined as those who have liquid assets of £50,000, but may be put off by traditional private bankers or private client stockbrokers.

According to Inscape's own research, the number of people with liquid assets of about £50,000 will grow to five million by 2005 from its current level of 3.4 million.

Future expansion

Although people require net liquid assets of £50,000 to join Inscape, it has recently introduced a deposit account which is open to anyone with as little as £20,000 to invest.

It is thought that this could be a response to poor take-up.

Inscape is in the process of setting up walk-in advice centres in areas which it has identified as "affluent".

The service provides a tailor-made investment and savings package for people with money to invest.

Growing concern

Ian Harley, chief executive of Abbey National admitted that there had been problems.

He said: "Inscape has had a slow start - I think because of the uncertainty in the equity markets, in particular, so customer acquisition has been slower than we had liked."

Despite this, Mr Harley said existing customers were pleased with the service, which would be in a good position to benefit once equity markets improved.

There is growing concern about the viability of these "mass affluent" services.

Michael Maslinski, a banking consultant, said: "I think that most banks are now realising that the 'mass affluent' sector is a much longer-term project than they had imagined."

Lloyds TSB is delaying the launch of Create, its wealth management service, until late this year and Alliance & Leicester shelved its own plans earlier this year.