03 May The Direct Market Dips in Q1 2022
Rampant inflation, fuel price increases, national insurance hikes and the cost-of-living crisis took an inevitable toll on investor sentiment and market prices – and that was before Russia invaded Ukraine. As a result, the FTSE All World was down 6% for the quarter, sending direct assets below £300bn once again (to £297bn).
Unsurprisingly, gross and net sales were lower than sales in the previous quarter and the first quarter of 2021, dropping to £10.1bn and £4.8bn respectively. Most D2C providers earn the bulk of their revenues during the all-important ISA season, so a sluggish first quarter is a blow.
Hargreaves Lansdown is by far the largest D2C provider in the market with interactive investor some way behind with just under half of its assets under management. In terms of asset growth, however, the fastest growing platform in the UK is Vanguard with £12.7bn in assets — it is closing in on larger rivals thanks to its simple and cost-effective solution.
Martin Barnett, Head of Content at Fundscape said, ‘The first quarter of the year is the bellwether of investor sentiment and sets the tone and pace of investments for the rest of the year. 2022 could be a tougher year for many D2C houses, especially the robos. But D2C providers should take heart from the fact that sales and assets are still much higher than pre-pandemic levels.
‘However, the cost-of-living crisis and the uncertain economic outlook will chip away at both investor sentiment and disposable income throughout the year. It’s highly unlikely that 2022 will be a repeat of 2021’s stellar business.’
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Notes to Editors:
The Direct Matters report covers the direct market and is published by Fundscape. It has been running since Q121 and this is the first press release on statistics. For further information or background please contact: press@fundscape.co.uk
- The estimated advised portion of HL’s business has been excluded.
Photo by So Okamoto on Unsplash