11 Aug Strong ISA & pension flows offset by market turbulence in Q2 of 2015

Stock market turbulence put a brake on platform asset growth in the second quarter. But despite the FTSE 100 falling by 4% during the quarter, platform assets rose by £5bn to £382bn, a rise of 1.3%.

Despite stock market volatility, platforms registered a new high in gross sales as the ISA season and pension freedoms converged to boost platform business. As a result, gross sales for the platform industry totalled £24.6bn, and on a year-to-date basis £47bn against £41bn in 2014. Net sales came to £11.1bn, bringing the year-to-date to £21.6bn against £20.6bn the previous year.

Cofunds and Fidelity were once again the leading platforms by gross sales, while Hargreaves Lansdown, Standard Life, Aegon and Zurich topped the net sales tables. Their sales successes were driven by different factors. Hargreaves Lansdown’s D2C business was boosted by ISAs. Strong retail advised business across a variety of products was behind Standard Life’s success, while Aegon and Zurich were underpinned by pension activity.

Sales by product were also surprising with ISAs strong despite the focus on pension freedom and the more uncertain investment outlook. Bella Caridade-Ferreira, CEO of Fundscape, said “All eyes were on pension freedom and the potential impact on investment flows, but in the background ISAs were quietly registering their best quarter on Fundscape records with gross and net flows up by £1bn and £800m respectively relative to the same period in 2014.”

Sales into pension products have been elevated since pension freedoms were first announced. Despite the inevitable slew of cash withdrawals that were expected once pension freedom went live, net sales into pension and Sipp products were strong at £4.5bn. “Fears of significant cash withdrawals proved to be baseless; although there was an early spike in cash withdrawals, platforms reported that withdrawals settled down to more normal levels by the end of the quarter,” said Caridade-Ferreira.

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Notes to Editors:

 The Platform Report is a confidential report published by Fundscape LLP.  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.

*For timing reasons and because the data is market sensitive, Hargreaves Lansdown reports its figures to Fundscape a quarter in arrears. The figures shown here have been estimated from actual Q115 data and historical trends. Aegon is not a contributor. Its figures are estimated from Q1 actual figures.

For further information or background please contact:

Bella Caridade-Ferreira     tel: 020 7720 1183              email: bella@fundscape.co.uk