Markets give platforms a reprieve in 2023: Fundscape

Fundscape published their headline platform figures for 2023 in early February. Today they have published further stats on the top PLATFORM PERFORMERS looking back on what was a particularly challenging year for the platform market.

According to Fundscape, 2023 was a bruising year for platforms and the final quarter was the worst on record with net sales of -£8m. For the second year in a row, investor sentiment has been battered by the cost-of-living crisis, the UK’s poor economic outlook, geopolitical uncertainty and the outbreak of wars. Customers and new flows have been hard to come by. But despite sluggish flows, market performance pushed assets to their highest level ever, enabling platforms to finish the year on a positive note… and better revenues!

Assets and asset growth
Indeed, several platforms recorded their highest assets under administration on Fundscape records — 7IM, Aviva, Fidelity, Morningstar, Quilter, Transact and True Potential — with both 7IM and Morningstar setting new milestones. In percentage terms, the best growth was from Morningstar and True Potential, which recorded growth rates of 26% and 23% respectively.

 
 

Gross and net flows
Gross and net flows were well below par across the platform industry3. For all-channel business, Aegon topped for gross flows thanks to its strong workplace business, and AJ Bell for net, thanks to a combination of advised and direct activity.

The adviser-only platform sector generally fared better for sales in 2023. Quilter was in pole position for gross, closely followed by Transact and Aviva. For net sales, True Potential led the field, again with Aviva and Transact not far behind. Although these platforms have different business models, they have stuck to their knitting and delivered a great service.

The Morningstar platform deserves a special mention. Although too small to be ranked in the tables below, it was home to its best gross and net flows ever, which is quite an achievement given the dearth of sales in 2023.

 
 

Bella Caridade-Ferreira, CEO of Fundscape said, ‘2023 could have been a lot worse, but market performance gave platforms a well-deserved reprieve from the arid sales conditions. The period of painful economic adjustment appears to be finally coming to an end, and cautious optimism is beginning to tick up.

‘2024 should see platform activity slowly but surely improve. The ISA season is unlikely to be good, but we expect investor sentiment to improve as the year wears on, although much will depend on positive inflation and interest rates news and the impact of sweeteners in the government’s budget. With general elections on both sides of the pond, this could be a very interesting year…’

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