Platform industry suffers worst Q2 sales since 2010
Platform sales failed to pick up between April and June this year, leading to the worst second-quarter performance since 2010.
According to the latest edition of Fundscape’s Platform Report, sales were a ‘bloodbath’, with gross sales rising to £34bn, but net sales plummeting from £9.4bn in Q1 to £5.5bn. This took the net-to-gross ratio to just 16.4% (down from 26.8% in the previous quarter), making it the worst second quarter for platform sales in 13 years.
Aegon enjoyed the highest gross assets for Q2 (£8.6bn), and for the first half of the year (£18.6bn), while also coming in top for net sales in H1 2023 at £3.6bn. However, AJ Bell scored the highest net sales at £1.1bn, followed by Hargreaves Lansdown at £902m and True Potential at £893m.
Flows were also down by an average of 48% against other second quarters over the past decade. However, the stock market performance gave assets a reprieve, with the FTSE All-World Index up by 3.2%, reflecting increased revenues for platform assets, back over the £900bn mark for the first time since Q4 2021.
The picture wasn’t much better for adviser platforms during Q2 2023. Net sales recorded their lowest figure since Q4 2011. Quilter came top for gross sales in H1 (£4bn) and Q2 (£2bn), while True Potential was first for net sales, with £1.8bn in H1 and £852m in Q2 2023. All adviser platforms suffered a downturn in gross and net inflows, while a small number registered a second quarter of net outflows.
Fundscape CEO Bella Caridade-Ferreira noted that one potential explanation was that the industry’s focus on implementing the Consumer Duty had meant less time spent with clients.
She argued that ‘The cost-of-living crisis, competition from cash, low consumer morale, and the Consumer Duty combined to wreak chaos on the platform industry in 2023. No platform has been spared from the downturn in business. Inflation easing for the year to July was welcome but also increased the likelihood of further interest rate rises, with a knock-on effect on the cost of living and disposable incomes. We don’t expect the outlook to improve before H1 2024, and platforms need to batten down the hatches and ride out the storm.’