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.