Net platform sales fell to their lowest levels since RDR in Q3 at £8.6bn, as the UK's uncertain outlook "made investors extremely cautious", according to the latest Fundscape Platform Report.
Despite a rise in UK platform industry assets by 9% over the period to £469bn, sales were weak in the third quarter.
Gross sales fell to £21bn, or their lowest volume since Q3 2014, while net sales plummeted to £8.6bn; the lowest since Q1 2013.
According to the Fundscape Platform Report, the third quarter of any year is "usually the quietest" but this year's flows were lower than expected.
Bella Caridade-Ferreira, CEO of Fundscape, said: "Stockmarkets were soaring, but the UK's uncertain economic outlook made investors extremely cautious with their investments."
However, asset growth was strong following the acquisition of Elevate by Standard Life, which saw its assets rise by 46%, and ahead of Aegon's acquisition of Cofunds at the end of this year. The group has already seen a 26% jump in assets to £11.2bn as it transfers legacy accounts to the platform.
Aegon saw the strongest net sales, pushing Hargreaves Lansdown off the top spot thanks to its ongoing customer upgrade programme. However, only £300m of the firm's £1.6bn net sales is attributable to net new flows.
Only pension businesses gained any real traction, with 73% of net industry sales. The report said: It is no surprise four of the top five platforms are insurance company owned, given their competitive advantage through delivering pensions."
Update: Aegon buys Cofunds for £140m to become industry's biggest platform
With shock results following both the EU referendum and the US election, Caridade-Ferreira said the platform industry should expect a prolonged period of uncertainty.
She added: "We expect the precautionary motive to save, the low interest rate environment and pension freedoms to keep platforms broadly on the right track.
"However, the business environment will be tough and competition for business will be fierce. In this hostile and volatile environment, further consolidation is to be expected and insurance companies are likely to lead the way."
| TOP 5 PLATFORMS BY GROSS SALES IN Q316 (£m) | |
|---|---|
| Cofunds (est)* | £3.5bn |
| Fidelity | £2.7bn |
| Hargreaves Lansdown (est)* | £2.3bn |
| Aegon | £1.8bn |
| Standard Life (inc Elevate) | £1.7bn |
Source: Fundscape Platform Report
| TOP 5 PLATFORMS BY NET SALES IN Q316 (£m) | |
|---|---|
| Aegon | £1.6bn |
| Hargreaves Lansdown | £1.1bn |
| Standard Life (inc Elevate) | £1.0bn |
| Aviva | £835m |
| Zurich | £645m |
Source: Fundscape Platform Report
A total of 19 platforms are included in the analysis. Platform coverage is estimated at 98% of the platform universe.
*For timing reasons and because the data is market sensitive, Hargreaves Lansdown and Cofunds report their figures to Fundscape a quarter in arrears. Hargreaves Lansdown's gross figures have been estimated but assets and net sales were sourced from its trading update.
