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With a stock market correction of 8% during the quarter, it was no surprise that platform assets shrank by 0.7% to £377bn — robust flows and a strong interest in all things pensions cushioned platforms from the worst. Fundscape’s Q3 Platform Report showed that gross flows were slightly lower than the last quarter at £24bn, but net flows rose to a new high of £13bn. On a YTD basis, gross sales were £72bn v £60bn in 2014, while net sales were £35bn v £30bn the previous year.
Stock market turbulence put a brake on platform asset growth in the second quarter. But despite the FTSE 100 falling by 4% during the quarter, platform assets rose by £5bn to £382bn, a rise of 1.3%.
Despite stock market volatility, platforms registered a new high in gross sales as the ISA season and pension freedoms converged to boost platform business. As a result, gross sales for the platform industry totalled £24.6bn, and on a year-to-date basis £47bn against £41bn in 2014. Net sales came to £11.1bn, bringing the year-to-date to £21.6bn against £20.6bn the previous year.
It was a sluggish first quarter for platforms. With polls predicting a hung parliament, investors held off on their investments until the outcome of the general election was clearer. Pensions also played a role in dampening flows. Not only did NS&I’s new rate-busting pensioner bonds divert the silver pound, but preparing the ground for new pension freedoms kept platforms and advisers busy throughout the first quarter.
In the first quarter of the year, platform assets under administration rose by £26.5bn (7.9%) to £370.8bn. Since March 2014 assets have expanded by £67bn, a rise of 22%. Three platforms outperformed the asset growth trend: Aviva, Zurich and Nucleus with YOY growth rates of 90%, 73% and 29% respectively.