The advised platform market has experienced its worst quarter for net flows on the lang cat’s records (which date back to Q1 2016), seeing just £4.3bn added in the final quarter of 2022. That compares to £9.7bn in Q4 2021 and £5.5bn in Q3 2022. Gross sales were also down (£15.6bn in 2022 Q4 versus £20.4bn in 2021 Q4).
Despite the record-breaking quarter for disappointing flows, the market saw total assets recover gently (up 3.8%) in Q4 2022 as stock markets made a spirited comeback, but it wasn’t enough to change the picture of 2022 as a whole.
Data collected by the lang cat shows total advised platform assets in 2022 were -£34.9bn (-6%) down year-on-year. Annual net sales were down (-31.1%) year-on-year while gross flows also fared poorly (-15.7%) in a difficult 12 months for the adviser platform market.
Rich Mayor, senior analyst at the lang cat, comments:
“The last quarter of 2022 is the lowest net sales for advised platforms on our records and rounds off a tough year for platforms. 2021 saw long-standing sales records beaten repeatedly for the right reasons, but 2022 has seen advised platforms reach new lows collectively for net sales.
“Although there’s some positivity in asset trends in the final quarter, which bring a welcome boost for platform and adviser ongoing fee revenues, gross and net sales continued to fall throughout the year. But while assets grew in Q4 for the first time in 2022 thanks to recovering stock markets, the falls in every other quarter means total advised assets at the end of 2022 are down just shy £35bn against the end of 2021.
“One cause contributing to these low numbers is less new money being placed on platforms due to the macroeconomic landscape in the UK. The other is a steady stream of outflows, which have been around the £10bn-£11bn per quarter mark since the UK emerged from the worst of the pandemic. Retirement plans that were delayed by the pandemic were put into action into 2021 and platforms have had a steady level of outflows since.
“That’s okay when you’re able to bring new business to replace it, but that amount of business is simply not there for most platforms at the moment.”
