08 Mar Q421 – Platforms, the pandemic and Putin
Despite the pandemic and a difficult two years, the platform industry broke every record going in 2021. Assets rose by 19% to £930bn aided by global stock markets while gross and net flows jumped to new highs of £164bn and £68bn — eye-watering increases of 29% and 89% respectively. What’s going on? Demand for advice has never been stronger thanks to pension freedoms, baby-boomers sailing off into the sunset, and what looks like the beginning of the great wealth transfer. Throw in private equity cash, regulatory changes, M&A activity, rapid advances in technology and of course the trends accelerated by the pandemic, and it’s no surprise that the industry is undergoing dramatic change to meet changing consumer needs.
Most platforms were home to double-digit asset growth, but the fastest two are at the epicentre of change — Praemium, which is about to be acquired by Morningstar, saw assets rise by 50% despite uncertainty about its future. While True Potential, which has just been acquired by PE house Cinven, was hot on its heels.
Stock markets may have been strong during the last three months of the year, but the UK was battered by persistent economic headwinds such as fuel and labour shortages and rampant inflation. Investors remained sanguine, however. So, while the first half of the year is usually the best thanks to the ISA season, the platform industry broke new records in the final quarter of the year with gross flows of £46bn and net flows of £24bn.
The platform tables below include all distribution channels. Being the largest platform in the UK by assets, Aegon always tops for gross sales, but this quarter it also topped for net sales thanks to a substantial institutional client win and its adviser business stabilising. Not far behind is Fidelity which was home to robust sales through both advised and consumer platforms.
On the advised front, the tables have also been reshuffled. Quilter recorded its best gross sales in four years. There was very little difference between Quilter and abrdn, but Quilter was ahead for the quarter while abrdn was ahead for the year. On the right-hand side of the tables, Aviva took pole for net sales for both the quarter and the year, knocking Transact off its perch for the first time in several years. The top platforms are routinely recording net sales of between £1bn and £1.5bn.
Bella Caridade-Ferreira, CEO of Fundscape said, ‘A couple of years ago we thought we were on the cusp of another roaring twenties. How wrong we were — first the pandemic and now Putin.
‘Higher inflation, interest rates and volatility are already here, subduing investor confidence. But the terrible war being waged by Russia on Ukraine, if not quickly contained, will weigh on the industry and investor sentiment for the foreseeable future.
‘Risk aversion will soar. Higher interest rates and the precautionary motive to save will be a magnet for risk-averse investors. Against all odds, the platform industry was home to its best sales in 2021 but that is unlikely to be repeated in 2022.’
To download the full press release click here.
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 Hargreaves Lansdown reports in arrears. Assets and net sales are actual, but gross sales are estimated.
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