16 Nov Q323 – worst net platform flows on Fundscape records
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!
While gross sales were static and net sales were making the wrong kind of records, the experience was not universal across the market. A small cohort of platforms continues to write robust amounts of new business and book solid net sales. The top five platforms for net sales in Q3, between them accounted for more than the market total – in other words, a significant number of platforms were in net outflow.
Looking at pure adviser platform propositions, the numbers are just as stark. Gross flows totalled £16bn and net flows plunged to an all-time low of £1.3bn. Top of the competitor charts were Quilter and True Potential, demonstrating the laser-sharp focus of vertically integrated business models. Not far behind were Aviva and Transact, opposite ends of the platform spectrum, and illustrating that while propositions can vary, service and user experience always win the day.
Bella Caridade-Ferreira, CEO of Fundscape said, ‘Although inflation is easing, it will not result in an immediate return to good times. The Israel-Hamas war is another major blow for global peace and economics, so the final quarter of 2023 could be even worse than the third.
‘The world is going through a painful economic adjustment that will last at least another year or two. Consumer finances and confidence will take time to rebuild. Platforms need to brace themselves for another disappointing ISA season and a difficult 2024, including two major elections on either side of the pond! It goes without saying that distressed companies and fire sales will present substantial M&A opportunities across the value chain.’
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Notes to Editors:
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 All platform assets. Includes institutional and workplace platforms.
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