Pensions help “sluggish” UK platform sales

Fund platforms that channel pensions savings have been the most resilient in recent months as broader fund sales plummeted.

Assets on platforms in the UK have risen by 17% this year – yet the third quarter (Q3) saw net sales drop off significantly.

Asset values on platforms belonging to firms like Hargreaves Lansdown and Standard Life reached £469 billion (€543.4 billion) – but the tail-off meant net sales in the last quarter were at their lowest since early 2013, according to Fundscape, a research house that publishes the ‘Platform Report’.

“In this difficult terrain, only pension business gained any traction with £6.3 billion invested through pension vehicles, in other words 73% of net industry sales,” said Bella Caridade-Ferreira, chief executive officer of Fundscape.

She added: “Given their competitive advantage in delivering pensions, it is no surprise that four of the top five platforms are now insurance company owned.”

The ‘Brexit bounce’ after the EU referendum in the UK, which saw the FTSE 100 and All-Share indices up 6% and 7%, drove the 17% rise in overall fund platform asset values, rather than sales.

The uncertain economic outlook acted as an extra drag on transactions, even though sales in Q3 are usually slow due to summer holidays, said Caridade-Ferreira.

Activity on the platform with the strongest net sales in Q3, Aegon, couldn’t mask the fall in sentiment. Aegon toppled Hargreaves Lansdown from the top spot “thanks to its ongoing customer upgrade programme”, said Caridade-Ferreira. But in reality only £300 million of Aegon’s £1.6 billion sales was attributable to net new flows, so platform industry net sales were actually lower (£7.3 billion) and therefore “particularly sluggish”, she said.

TOP 5 PLATFORMS BY ASSETS IN Q316 (£bn)
Cofunds (est)* £81.9bn
Fidelity £69.3bn
Hargreaves Lansdown £67.6bn
Standard Life (inc Elevate) £42.3bn
Old Mutual £41.0bn

©2016 funds europe

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