Channel differences

Platform Channel

Channel differences

Our quarterly Platform Report was published a couple of weeks ago. It’s popular with platforms and fund managers as it allows them to benchmark themselves and monitor overall trends in the platform space.

Some platforms are reluctant to share their quarterly figures (sales and asset growth), so the report is confidential and circulation is restricted. We release headline industry figures to the press and throw in the top three platforms for assets, asset growth, gross and net sales.  However, the large multi-proposition platforms can often obscure developments in certain areas of the industry. As a result, we also analyse platforms by their different propositions, which include fund platform, wrap, corp/DC, institutional, sub-advised and D2C.  Some of the proposition breakdowns are estimated, but we try to get as much guidance on our estimates as possible from the platforms themselves and from their competitors.

Again, these figures can be sensitive, so for the broader public we group the proposition splits into three overarching channels: Retail advised (fund platform, wrap and sub-advised), Corp/Institutional which brings together institutional and corporate/workplace platforms, and finally D2C, which includes execution-only, discount brokers and any D2C propositions on platforms.

Channels** Retail Advised Corp/Instit D2C/XO Total
AUA £188.0bn £48.1bn £67.4bn 303.5
AUA (%) 61.9% 15.8% 22.2% 100%
Gross sales £9.5bn £6.3bn £4.0bn £19.8bn
Gross sales (%) 48.0% 31.8% 20.2% 100%
Net sales £4.7bn £2.6bn £2.4bn £9.7bn
Net sales (%) 48.5% 26.8% 24.7% 100%

Our analysis revealed some interesting developments. The Retail Advised channel for example, accounted for 62% of total platform assets, but in terms of gross and net sales accounted for a lower percentage of sales.  It was outsold by the corporate/institutional channel which has the lowest market share of assets (16%), but is punching well above its weight with 32% and 27% of gross and net flows. The D2C channel was also punching above its weight, but less emphatically.

In the retail advised channel, the largest platform by assets is Cofunds with approximately £34bn in AUA (our estimates), but it is a closely fought race with Cofunds and Standard Life wrap neck and neck for gross sales, and Standard Life by far the leader of the field for net sales (£908m).   Three platforms pretty much have the corp/institutional channel carved up between them, Cofunds, Fidelity and Zurich, while Hargreaves Lansdown dominates the D2X/XO channel with two thirds of the assets and flows.

The impact of regulation on these channels is profound.  The D2C channel is growing at a faster pace since RDR, Auto Enrolment is driving the corporate workplace savings segment, while recent budget announcements on the abolition of compulsory annuities and the sexed-up ISA will drive sales up through most channels and propositions. The million pound question is by how much?

Have a great (and short) week.