Platforms increase market share in UK distribution

Legs-below-barFund platforms in the UK gained a larger slice of gross retail sales in June, recent figures showed.

Their market share increased from 40% in June 2011 to 44% in June 2012 based on gross sales of £3.1 billion (€4 billion) from 12 platforms.

The figures, released by the Investment Management Association (IMA) last week, showed the market share for ‘Other Intermediaries’ – which includes wealth managers and stockbrokers - stayed the same at 45% based on gross sales of £3.2 billion.

‘Direct’ gross sales were £724 million and their market share declined from 15% to 10%.

The increase in market share comes about after platforms expanded their offering as a result of the Retail Distribution Review, which comes into force in December this year and which bans commissions charged for financial advice in the UK’s retail funds industry. It also proposes to end fees paid by fund managers to platforms. RDR has made lower cost products, such as exchange-traded funds, more viable for platforms to sell.

Meanwhile, the broader IMA figures showed net UK retail fund sales nearly doubled in the first half of 2012 compared to the previous six months – but fell below the monthly average in June.

The IMA registered sales of £8.1 billion (€10.4 billion) for the first half of this year, which compared to £4.4 billion in the second half of 2011.

In June, fixed income remained the best-selling asset class for the tenth consecutive month.

However, net retail sales in June were £820 million, below the monthly average of £1.2 billion for the previous 12 months and the lowest month this year.

Richard Saunders, IMA chief executive, said in the first six months of 2012, net retail sales had steadied at about a £1 billion a month, following the “very strong performance” from 2009 to the first half of 2011.

Funds under management in June totalled £598 billion, compared to £604 billion in June 2011.

©2012 Funds Europe