Advised Platforms suffer highest ever outflows in 2023: the lang cat

by | Feb 6, 2024

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Releasing their latest platforms report and analysis today, the lang cat have detailed platform sales for Q4 as well as 2023 highlights for investment platforms

Advised platform asset growth:

  • Total advised platform assets in Q4 2023 are £575.14bn, up 5.34% on Q3 2023 (£545.96bn) and 8.97% on Q4 2022 (£527.80bn). 

Advised platforms gross sales:

  • Q4 2023 advised gross sales of £16.06bn, up 1.94% on Q3 2023 (£15.75bn) and 16.57% on Q4 2022 (£13.77bn).
  • 2023 total advised platform gross sales are £63.41bn, -2.49% on 2022 total (£65.03bn).

Advised platforms outflows:

 
 
  • Q4 2023 outflows from advised platforms are £14.89bn, up 6.88% on Q3 2023 (£13.9bn), and up 51.05% on Q4 2022 (£9.85bn)
  • Outflows for 2023 are record high of £53.18bn, up 36.34% on 2022’s total.  (2022: £39.01bn).

Advised platforms net sales:

  • Q4 2023 advised net sales were just £1.17bn – a third consecutive record low quarterly total. Net sales in Q4 2023 are -35.76% on Q3 2023 (£1.82bn) and -70.11% on Q4 2022 (£3.92bn).
  • 2023 total advised platform net sales are £10.23bn, -60.70% on 2022 total (£26.02bn).

More money was taken out of platforms in 2023 than in any other year as outflows continued to hit record highs each quarter. In the fourth quarter, outflows were £14.89bn, and are £53.18bn for 2023 as a whole, up over a third on 2022’s total (£39.01bn). 

Withdrawals from ISAs and pensions from platforms took a hammering throughout the year, with outflows achieving new heights every quarter.

 

Despite the overall negative picture, advised platform assets and gross sales did show signs of improvement in the final quarter of 2023. 

Assets under management for advised platforms (21 in total) increased by 5.34% in the final three months of the year to total £575.14bn, recovering the lost ground from volatility since Q4 2021 (£567.93bn).  

The optimism from falls in inflation and hope that we might have seen the peak in interest rate increases also boosted new flows onto platforms. Gross advised sales figures of £16.06bn are up by 1.94% on the previous quarter and up 16.57% vs. Q4 2022. 

 

Rich Mayor (pictured), senior analyst at the lang cat, said: “The last quarter of 2023 rounds off the dominant theme of rising outflows hammering net sales in the advised platform market.

“Gross sales have been steady throughout, but the wider economic conditions mean more money has been taken out of platforms in 2023 than in any other year, with ISAs and pensions bearing the brunt of it. 

“We’ve tracked the reasons for the increase in outflows with advisers in both qualitative and quantitative exercises throughout the year, but our largest exercise for State of the Advice Nation was in field during Q4 too. 

 

“The results show that the cost-of-living crisis meant financial plans had to be adjusted for a good portion of clients. The main reasons cited were investors supporting themselves and family members with the increase in household expenses, followed by concerns over capital preservation in volatile markets. 

“On the latter point, we’ve also noted a shift in advisers’ retirement income strategies, with an increase in the use of annuities for more risk-averse clients.” 

Now in its sixth year, the lang cat’s deep dive into the advice profession, State of the Advice Nation, is due for publication later this week and its full analysis of platforms is available to subscribers in March. 

 

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