Flows into UK fund platforms set records in the first half of the year driven partly by Covid-19 vaccines and the participation of younger investors.
Assets in the platform sector – a sector that includes asset managers like Abrdn and Fidelity, insurers such as Aegon, and independent advisers like Hargreaves Lansdown - grew by 6.5% to £865.8 billion (€1.021 trillion).
According to Fundscape, a platform data provider that produced the figures, pent-up spending from lockdowns partly explained why gross inflows in the second quarter jumped to £41 billion, while net sales broke through £17 billion - a new record for the industry.
Platforms such as Hargreaves Lansdown that have “strong D2C [direct-to-consumer] propositions” benefitted from an apparent surge in younger investors and demand for digital wealth services, Fundscape said. Hargreaves net sales were £3.7 billion in Q2 – 22% above the previous quarter.
Bella Caridade-Ferreira, Fundscape CEO, said: “It has been gratifying to see younger investors take an interest in their finances in the past year. Now that lockdown restrictions have eased and normal life is on the horizon, the D2C spike is likely to drop to more normal levels.”
Some of the £168 billion accumulated by UK households in excess savings would benefit adviser-owned platforms, whose flows Caridade-Ferreira predicted would remain more consistent than D2C platforms.
Despite a potential drop in D2C business, “some things won’t go away”, she predicted. “Demand for ESG, digital wealth management, and low-cost investment are trends that are here to stay. Demand for advice and investment is strong – but investors want it in a different format.”
Data from fund transaction network Calastone this week showed that ESG fund flows in July saw their second-best month ever, at £995 million. ESG equity funds accounted for 90% of July equity fund inflows.
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