07 Nov A sizzling summer for the platform industry – third quarter update

The summer period is usually one of the quieter quarters of the year, but an improving economic outlook and the ongoing effect of the Retail Distribution Review (RDR) led to a bumper quarter for platforms. Total platform assets under administration were £267bn, up 7% in the second quarter, and comfortably ahead of FTSE All-Share growth of 5%.

The largest platforms by assets under administration are Cofunds, Fidelity and Hargreaves Lansdown*. In terms of percentage growth, however, the fastest growing platforms in the third quarter were Nucleus with the growth of 8.8%, Ascentric with the growth of 8.7% and in joint third place, Axa Elevate and Cofunds with the growth of 8.5%.

Gross platform flows were marginally down on the previous quarter to £17.2bn, but compared to the same quarter in 2012, were up by a substantial 45%. Bella Caridade-Ferreira, CEO of Fundscape, said “The third quarter of 2012 was moribund for the industry as a whole, so the uplift looks pretty good. Nonetheless, a combination of improving economic fundamentals, the feel-good factor that comes with a warm summer, and the fact that RDR has been great for the platform industry, has meant that gross flows stayed on an even keel despite the traditional holiday period.”  

It was an even rosier picture for net flows which totalled £8.9bn for the third quarter – marginally down on the ISA-boosted second quarter, but up a whopping 75% on the same quarter of 2012. Caridade-Ferreira said, “Adviser charging has meant that platforms are now capturing much more adviser business than before. In addition, a swathe of re-registrations has boosted platform activity. However, the reality is that investor sentiment has been improving quarter on quarter and that’s what’s driving sales.”