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In Lipper Feri’s most recent assessment of the UK fund market, released a fortnight ago, the fund analysis firm addresses most of the topics expected from such a report.

It estimated the UK domestic market last year accounted for roughly €25.5bn (£20.1bn) in net sales - the best in Europe and “a respectable figure” given the impact of the sub-prime crisis. It predicted the industry will grow at 9.9 per cent over the next five years - slower than it has grown in the recent past, but faster than all other industries on the Continent (apart from Germany’s). And it forecast that UK fund managers’ total assets could more than double to €1.1trn by the year 2012.

But the report also made a number of observations, somewhat hidden beneath the headline growth projections, about IFAs and their impact on the domestic fund industry. For example, out of every 10 funds sold in the UK, eight are executed through an IFA - a remarkable figure and one that sets the UK apart. How has the prominence of the financial intermediary shaped the UK industry as a whole? Lipper highlighted two ways.

First, the foreign share of the UK market - just 5.6 per cent - is quite small, and this is due, the report contended, to UK IFAs’ predilection for “home-grown funds”. The second point is that product development in the UK has been “more sedate” than on the Continent because UK IFAs tend to prefer established funds with proven track records.

The first point may seem remarkable, but it is, in fact, a moot point, according to Lipper chief executive Diana Mackay, as UK regulations have effectively made it very difficult for foreign groups to enter the market. “Until recently,” she says, “there really hasn’t even been a good opportunity. Most companies’ primary route into the UK has been through acquisition - ABN Amro, Credit Suisse, UBS and Deutsche Bank are just a few examples.”

Since distribution share-class rules were changed a couple of years ago, it has been far easier for funds domiciled in Dublin or Luxembourg to access the market, but “there’s going to be some time lag”.

“And it takes time to convince IFAs it’s a good idea,” she adds.

Lipper’s report also claimed UK IFAs are generally becoming more “open-minded” about offshore products and predicted the sale of these funds will increase as more of them gain a presence on fund platforms, which are set to boom in the UK.

By the analysis firm’s own estimation, UK fund assets under platform administration - based on new business and the transfer of existing business - could nearly quintuple from €97bn to €459bn by 2012.

In the case of the second point, what may seem at first like a negative is in fact a positive, Ms Mackay argues.

“In Europe, you have about 250-300 new fund launches every month, and those funds generally take the bulk of inflows, so you have most money chasing the latest theme - commodities, absolute return, emerging markets. That makes for a very volatile industry. It’s not a good strategy for long-term savings - it’s fashion, and people get burned.”

In fact, there are currently more than 30,000 funds in Europe including the UK, whereas in the US market, which is nearly three times’ bigger in terms of assets, there are fewer than 7000. The independent financial adviser, Ms Mackay says, has played a very important role in checking the “fund proliferation” that increasingly plagues the rest of Europe.

And while she acknowledges it would be presumptuous to claim that the UK fund industry is what it is today simply because of the relative importance of IFAs - “it’s hard to know what’s the chicken and what’s the egg” - she does contend that their influence on the industry has been generally very positive and that IFAs will continue to stand the UK in good stead.

“There is no doubt the environment in the UK has fostered a robust, independent distribution segment, which has helped support an independent asset management industry,” she says.

“In the long run, when you look at the difficulties in the financial sector now, the strength of the independent advisory structure will help the UK bounce back quicker than Europe. The impact on European mutual funds will be much greater.”