Platform assets continue to decline despite ‘resilient’ adviser flows
Statistics from the consultancy showed sales across all channels fell 5.3% from the first quarter of 2022 to total £27.9bn. Net sales were down 21.2% from the first quarter, totaling £8.9 billion. Outflows rose slightly to £18.9bn, he added.
chat lang said advised platforms “showed resilience in the face of economic headwinds” with gross sales of £19.38 billion, down 8.4% from the previous quarter, while net sales were £8.9 billion, down 11.6%.
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He said: “While a big deal for Multrees paints a slightly better picture (and skews the company-level data slightly), advisers were pragmatic with their client books, ensuring subscriptions to the ‘ISA and pensions were subscribed to as much as possible.”
Source: chat lang
Rich Mayor, principal analyst at lang cat, explained: “As we expected after last quarter, advisors were pragmatic in ensuring that this year’s subscriptions were used in the second quarter of 2022. Sales were up. been subdued but still comfortably above pre-pandemic levels who we spoke to are spending much more time reassuring their existing customers and fine-tuning their financial plans to deal with the UK’s deteriorating economic situation. United.
“We know advice is often a disposition of the wealthy, but even the wealthy will feel the pinch of inflation and gloomy predictions of energy cap hikes in October and January next year. It’s hard to see a way to avoid a recession, certainly if things stay on the same path.”
He added: “While sales have been resilient, assets have fallen significantly. Across all channels, we have seen £66.9bn cleared from the platform market since the end of a bumper 2021, and it’s not very often that we write that assets are down year-over-year.
“This in turn affects the profitability of platforms in terms of revenue from asset charges, which in turn affects shareholder returns. Platforms will put their arms around their biggest supporters to try and protect revenue streams. .
“If the trend continues for an extended period of time, which it certainly will if we can’t avoid a recession, we’ll see platforms move into markets where they haven’t been before to help ease the pressure.
“This quarter will probably be the last time we see these kinds of relatively good sales numbers for a long time.”
Fundscape’s latest statistics painted an equally bleak picture.
He said that for the second quarter, the platform’s total assets were £838.4 billion. Quarterly asset growth fell 5.9% to £52.2bn, while gross sales were £31.1bn, net sales were £8.5bn and the ratio net/gross of 27.2%.
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Fundscape said at this point last year that the world was emerging from the Covid pandemic and there was a sense of optimism about the future. However, he said that had been replaced by a “sense of hopelessness and the worst economic and geopolitical challenges in a generation – soaring inflation, the cost of living crisis and the war on Ukraine”.
Fundscape said it was unsurprising that the platform’s assets were down around 6%, with the FTSE All Share down a similar amount.
He added that the streams painted a “darker picture”.
“Investor confidence plummeted and gross and net flows fell to their lowest level since the third quarter 2020 lockdown period, exacerbated in particular by a decline in ISA flows.”
He added that business on the advisor platform was stronger overall. According to Fundscape, two vertically integrated platforms – Quilter and True Potential – topped the charts, highlighting their ability to support and work closely with their advisors and investors in difficult market conditions.
Bella Caridade-Ferreira, CEO of Fundscape, said, “The economic outlook is fragile at best, with little prospect for improvement in the short to medium term. With inflation soaring and fuel prices at unsustainable levels, investor confidence and disposable income will shrink fresh low.
“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 form of Consumer Duty.
“The platforms that survive will be able to adapt to disruption and diversify into multi-channel businesses. Consumers will need significant support over the next few years and will expect their finances to be both digital and transparent across a range of products and services.