11 Aug The heat is on – the platform industry in H122
Thermometers are red hot this week as the UK lives through yet another heatwave and reminds us just how poorly equipped the UK is to cope with extremes of any kind. It’s a similar story in the UK platform industry where the heat is also on. This time last year, the world was moving on from the Covid pandemic and there was a sense of optimism about the future. It has been replaced by a sense of despair and the worst economic and geopolitical challenges in a generation – rampant inflation, the cost-of-living crisis, and the war on Ukraine.
With the FTSE All Share down by 6%, it’s unsurprising that platform assets shrank by a similar amount. Flows paint a bleaker picture. Investor confidence has plummeted, and gross and net flows fell to their lowest point since the Q320 lockdown period, exacerbated in particular by a drop in ISA flows. Understandably, D2C platforms were more affected by the change in sentiment and fall in ISA sales, but Hargreaves Lansdown and AJ Bell still topped the all-channel net sales table for both the quarter and the year to date.
Adviser platform business was stronger overall. Quilter and True Potential stood out from the crowd, their vertically integrated models enabling them to closely support and work with their advisers and investors in difficult market conditions.
Bella Caridade-Ferreira, CEO of Fundscape said, ‘The economic outlook is shaky at best, with little prospect of improvement in the short to medium term. With rampant inflation and fuel prices at unsustainable levels, investor confidence and disposable income will shrink to fresh lows.
‘Investors and platforms will have to learn to live with the new normal. For platforms, the downturn comes just as they face another huge regulatory hurdle in the shape of Consumer Duty. The platforms that survive will be adept at adapting to disruption and diversifying into multi-channel businesses. Consumers will need significant support over the next few years and will expect their finances to be both digital and seamless across a range of products and services.’
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 click here.
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 are actual from the trading update. Flows have been estimated from trading update.
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