Platform assets continue to fall despite resilient flows from advisers. A tough second half is coming

by | Aug 11, 2022

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As markets continued the volatility shown in the first quarter, total platform assets fell by 6.62% on Q1 2022 numbers, and advised assets only just performed slightly better (-6.08%), according to the lang cat’s latest quarterly Platform Market Scorecard.

Sales across all channels were down by 5.31% on Q1 2022 to total £27.9bn, while net sales were down 21.17% (vs. Q1 2022), totalling £8.92bn. Outflows increased marginally to £18.90bn (Q1 2022: £18.10bn).

Advised platforms showed resilience in the face of the economic headwinds with gross sales of £19.38bn, down 8.37% on the previous quarter, while net sales came in at £8.85bn (-11.57% on Q1 2022). Though a large deal for Multrees paints a slightly better picture (and slightly skews the firm-level data) advisers were pragmatic with their client books, ensuring ISA and Pension subscriptions were taken up where possible.

Rich Mayor (pictured), senior analyst at the lang cat, comments: “As we expected after last quarter, advisers have been pragmatic in ensuring this year’s subscriptions are utilised in Q2 2022. Sales were muted but still comfortably above pre-pandemic levels. Advisers we’ve spoken with are spending much more time reassuring their existing clients and tweaking financial plans to tackle the deteriorating economic state of the UK.

“We know advice is often a provision of the wealthy, but even the well-off will feel the pinch of inflation and the grim predictions on energy cap rises in October and January next year. It’s hard to see any way to avoid a recession, certainly if things stay on the same course.

“While sales have been resilient, assets have dropped substantially. Across all channels we’ve seen £66.91bn wiped off the platform market since the end of a bumper 2021, and it’s not very often we write that assets are down year-on-year. That in turn affects platforms’ profitability in terms of revenue from charges on assets, which knocks on to shareholder returns. Platforms will be putting their arms round their biggest supporters to try to protect revenue streams.

“If the trend continues for an extended period, which will certainly be the case if we can’t swerve a recession, we will see platforms moving into markets they’ve not been in before to help alleviate the pressure.

“This quarter’s likely to be the last time we see these sorts of relatively good sales numbers for a long time to come.”

 

The top 5 providers for AUA, gross flow and net flow for Q2 2022 were as follows:

Platform Advised channel AUA Q2 2022   Platform Advised channel gross inflow Q2 2022
abrdn £68.27bn   Multrees £2.98bn
Quilter £65.78bn   Quilter £1.89bn
Transact £50.30bn   Aviva £1.73bn
Fidelity Adviser Solutions £44.58bn   Transact £1.70bn
AJ Bell Investcentre £44.30bn   Abrdn £1.69bn
     
     
Platform Advised channel net inflow Q2 2022  
Multrees £1.92bn  
True Potential £1.30bn  
Aviva £1.05bn  
Transact £1.01bn  
AJ Bell £0.90bn  

 

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