Standard Life has confirmed that the Elevate platform will continue as a discrete platform proposition and will not be merged into the Standard Life one. Advisers will be pleased as punch. And relieved.
It’s beginning to look like a trend. First we had the tiny Aegon platform making a play for the massive Cofunds platform, and last week it was announced that Interactive Investor is to buy TD Direct, TD Bank’s European direct business.
When RDR became reality and the advice gap widened, it was only a question of time before a FANG (Facebook, Amazon, Netflix and Google) or a traditional supermarket chain like Tesco, Waitrose or Sainsbury’s disrupted the financial services market with their client knowledge and big data.
Gatekeepers. That word strikes fear into many fund managers' hearts and rightly so. These are the people who increasingly influence and direct the volume of sales in the UK, and if a fund group isn't on their radar it's potentially missng out on some sizeable assets. The problem becomes even more acute when the investment outlook is stormy and investors are taking shelter.
The Gatekeepers analysis by Fundscape and GBi2 was designed to shed light on this murky world and help fund groups understand and pinpoint available opportunities. But it was also designed to help advisers and investors make sure they work with gatekeepers who are actually making a demonstrable difference to investor outcomes.
So after months of speculation, Aegon finally announced that it is acquiring the Cofunds platform for £140m. The mood at Witham is understandably elated, much to L&G’s amazement. To be blunt though, when you’ve hit rock bottom the only way is up. The team is ecstatic to be joining a parent that actually wants to be a major player in the platform game and hopes the days of operating on a shoestring are finally over.
THE UK WAS LEFT REELING BY THE BREXIT VOTE. RESPONDENTS ARE FEARFUL FOR THE FUTURE.
Ordinarily, the June sentiment survey would have been conducted Mid June and the results provided a week later, but we decided to wait for the EU referendum on 23rd June. The shock result left everyone reeling, and this sentiment survey specifically explored fund groups, platforms and distributors' immediate reactions to the result.
There were a total of 80 responses in June. Of these, 53% were from fund groups, 35% from platforms, 5% were distributors (advisers, wealth managers etc) and the rest were banks and life companies. Most respondents were UK-based, although 16% said they were cross-border or domestic European fund providers.
Following the UK’s historic vote in favour of leaving the EU which stunned the European political establishment and caused financial market turmoil around the world, concerns over the health of the UK property sector, which first arose in the run up to the referendum, have intensified.
A long and sultry summer of sports and social events used to distract the haut monde from investments and led to the old adage of 'Sell in May and go away, come back on St Leger's Day'. Whether stock markets underperform during the six-month period has never been conclusively proven, but respondents to our May survey were undoubtedly more cautious on the outlook for the second quarter. But it's Brexit and not tennis is overshadowing proceedings.
According to the Investment Association, the top sectors of 2015, by net sales, were UK Equity Income, Targeted Absolute Return and Europe ex-UK. Fund groups lucky enough to have funds in these sectors will have had a good year, and if their funds were on any shortlists, they probably had a great year. How much impact does being selected by a gatekeeper have on a fund's fortunes? We ran our gatekeepers analysis to find out which funds had performed best and whether there was any correlation between performance and the number of selections they had attracted. All of the funds shown below are ranked on their three-year returns. The tables below include a mix of the best funds by performance and the funds with the most gatekeeper selections. The ones with the most gatekeepers usually attract the most flows.
So Standard Life is buying Axa's Elevate platform. Howe exciting! All we need now is for Aegon to confirm that it's buying Cofunds and that will be industry consolidation sorted for a little while. A tie-up between the two makes sense. Standard Life has big ambitions and the Axa group had made clear that it wanted out. It makes sense for Elevate to move to a parent that wants it and has a long-term stake in the industry.
The Fundscape Gatekeepers study has attracted a lot of attention. The launch events were exceptionally well attended by fund groups and advisers, and the feedback was emphatically positive. Among the gatekeeper cohort, however, the reception was slightly mixed. Some got in touch to check we’d analysed their lists and sent us their selections. Most kept their distance, but one or two went on the attack, criticising the quality of the research.
The gatekeepers who went on the attack have neither read the report nor seen the analysis. I’ll repeat that again — they have neither read the report nor seen the analysis — which we found amusing and bemusing in equal measure. You see, we got in touch with them and offered them a full demonstration and explanation of our analysis, but they turned us down, so everything they say and write is based on misconceptions, flawed assumptions and conclusions...