Election uncertainty and pensions changes behind platform sales slide

Election uncertainty and pension reforms contributed to fund platforms enduring a lethargic first quarter, according to data released by Fundscape.

Election uncertainty and pensions changes behind platform sales slide

The report, published 15 May, showed that net platform sales for Q1 2015 fell short both year-on-year and against the previous quarter.

A net total of £9.3bn in purchases marked a 23.1% slide on the £12.1bn recorded in the three months to 31 December, alongside a £500m year-on-year decline.

The drop came in spite of gross platform sales proving relatively healthy, with the £21.4bn registered in Q1 2015 representing a slight decrease on the £22.1bn the quarter prior but marking a step up on £19.9bn total 12 months earlier.

Topping the Q1 gross sales table was Cofunds on £5.5bn, followed by Fidelity’s £3.2bn and Hargreaves Lansdown’s £2.46bn totals.

Cofunds also snagged pole position in terms of Q1 assets with £76.1bn – 24.5% higher than second-placed Fidelity’s £61.1bn, with Hargreaves Lansdown lagging a further £10bn behind on £51.5bn.

However, Hargreaves Lansdown registered the highest net sales figure in the quarter, hitting £1.5bn in new money against Standard Life and Zurich’s £1bn and £745m respectively.

Aviva almost doubled its total platform assets in the past 12 months, exhibiting year-on-year growth of 90.2%. Zurich was not far behind on 73.3%, before a significant gap to third-placed Nucleus’ 28.9%.

In channel terms, retail advised significantly increased its share of total platform purchases, with net and gross sales jumping 61% and 53% respectively.

Bella Caridade-Ferreira, CEO of Fundscape, cited the General Election, the changing pensions landscape and fears over Greece exiting the EU as influential in stemming investment activity.

She said: “Gross flows were robust, but as indicated by net flows, there was more switching than usual and less new money overall.”

“With the elections behind us and pension freedom a fact of life, we expect an upturn in the second quarter. But these things take time to filter through and we may not see a real upswing in net flows until the third quarter of the year.”

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