12 Aug An Olympic 2nd quarter for the platform industry
The UK platform industry followed up a great first quarter of 2021 with a second one of Olympic-style proportions and yet another clutch of records. With restrictions easing and consumers spending more, a robust recovery was to be expected. Markets didn’t disappoint — the FTSE All Share rose by 5% in the three months to June, while platform industry assets grew by 6.5% to £865.8bn.
Spend and save
Consumers may have started spending, but they also have considerable cash savings behind them. This excess cash and pent-up demand for investments saw gross flows jump to £41bn while net sales broke through £17bn for the first time on record. The tail-end of the ISA season helped as did the positive momentum from vaccine and Brexit/US news.
A surge in younger investors and demand for digital wealth services have benefited platforms with strong D2C propositions — Hargreaves Lansdown’s net sales skyrocketed to £3.7bn — a 22% rise on the previous quarter — while D2C sales at AJ Bell, Aegon and Fidelity were almost neck and neck with adviser channel sales.
A word of advice
You’d be forgiven for thinking that direct business was the only game in town, but adviser platforms were also commanding a chunky market share of assets and net sales (63%). Indeed, D2C flows are likely to ease in line with lockdown restrictions over the coming months, but business through adviser platforms is expected to remain steady and consistent.
Adviser platform assets rose to £545.8bn while gross and net sales totalled £20.9bn and £10.1bn respectively. True Potential, the vertically integrated advice and platform business, rose to the top of the net sales table ahead of Transact with net sales of £1.4bn for the quarter. For year-to-date net sales, however, Transact tops the net sales leader board, with Aviva snapping at its heels.
Bella Caridade-Ferreira, CEO of Fundscape said, ‘It’s been gratifying to see younger investors take an interest in their finances and invest this past year. Now that lockdown restrictions have eased and normal life is on the horizon, the D2C spike is likely to drop to more normal levels. But some things won’t go away — demand for ESG, digital wealth management, and low-cost investment are trends that are here to stay. Demand for advice and investment is strong, but investors want it in a different format.
‘The first half of the year was boosted by the ISA season and pent-up demand from 2020. Sales in the second half are likely to be robust but not as strong. There is still a lot of cash on the sidelines — UK households have accumulated some £168bn in excess savings that will be gradually spent or (hopefully) invested.’
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The Platform Report is a confidential report published by Fundscape. To subscribe to the report, platforms must contribute asset and sales data on a quarterly basis. For further information about the report and Fundscape, please visit www.fundscape.co.uk. A total of 19 platforms are included in the analysis. Platform coverage is estimated at 98% of the platform universe.
1 HL gross sales are estimated.
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