Download press release here.
Chinese concerns and Brexit fears spooked the stock markets and sent retail investors scurrying for cover in the first quarter. Stock markets have since been home to a modest recovery, but with the Brexit referendum approaching fast, investors are putting some investments on hold.
According to the Fundscape Platform Report, despite volatile markets and stock market growth of 1% in the first three months of the year, platform assets under administration rose by 3% (£13bn) to £415bn. Gross platform sales in Q1 totalled £21.2bn, marginally higher than sales in Q415, but down 7% on the first quarter of 2015. With investors running scared, the net sales total slipped below £10bn (£9.4bn) for the first time since Q314.
Download full press release here.
With a stock market correction of 8% during the quarter, it was no surprise that platform assets shrank by 0.7% to £377bn — robust flows and a strong interest in all things pensions cushioned platforms from the worst. Fundscape’s Q3 Platform Report showed that gross flows were slightly lower than the last quarter at £24bn, but net flows rose to a new high of £13bn. On a YTD basis, gross sales were £72bn v £60bn in 2014, while net sales were £35bn v £30bn the previous year.
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.
It was a sluggish first quarter for platforms. With polls predicting a hung parliament, investors held off on their investments until the outcome of the general election was clearer. Pensions also played a role in dampening flows. Not only did NS&I’s new rate-busting pensioner bonds divert the silver pound, but preparing the ground for new pension freedoms kept platforms and advisers busy throughout the first quarter.
In the first quarter of the year, platform assets under administration rose by £26.5bn (7.9%) to £370.8bn. Since March 2014 assets have expanded by £67bn, a rise of 22%. Three platforms outperformed the asset growth trend: Aviva, Zurich and Nucleus with YOY growth rates of 90%, 73% and 29% respectively.
Geopolitical clouds gathered for the fund industry in the second half of the year, but platforms weathered the storm thanks in particular to robust pension product flows. As a result, platform flows rose to record highs in the fourth quarter, with gross sales totalling £22bn and net sales coming in at just over £12bn.
According to the Fundscape Platform Report, it was a remarkable year for the industry. Platform assets rose by £50bn to reach £343.7bn at the end of the year, a growth rate of 17% that overshadowed the FTSE 100’s -2.7% for the same period. Pension freedom and the ongoing demand for income were the two main factors that drove flows and worked in the industry’s favour. Gross sales for the year rose by 21% to £82bn from £68bn in 2013, while net sales were up by 16% to £42bn from £36bn in 2013.