Global stock markets were down, but UK stock markets were up in the third quarter. The net effect was that platform assets flatlined with a tiny 0.2% rise to £906bn. The UK economy also flatlined in the third quarter, narrowly avoiding a recession as high interest rates and inflation weighed on consumer confidence and households struggled with living costs. Gross sales were stable at £32.7bn, but uncertainty, lower disposable incomes and the siren call of cash and gilts, resulted in substantial outflows. Net flows plummeted to just £2.3bn — the worst quarterly net sales on Fundscape’s records —resulting in a net-to-gross sales ratio of just 7%. Seven!
With a disappointing ISA season having set the tone for the rest of 2023, the third quarter was always going to be a struggle. But thanks to modest upturns in stock markets, assets crept back over the £300bn mark, regaining a significant milestone for the direct platform market. Flows, however, disappointed with gross flows slumping to below £9bn and net flows dropping to a dismal £1.8bn — not their lowest ever, which was £1.5bn in the last quarter of 2022, but not far off it either.