Hargreaves set to dominate flows tables in worst quarter since RDR

Hargreaves Lansdown is set to dominate flows tables for Q3 2019 – set to be the worst quarter since the retail distribution review.

Net platform sales totalled just £6.6bn over the quarter, according to Fundscape. But market movements saw assets rise 2.5% over the period, or £691.3bn.

Fundscape estimated that Hargreaves Lansdown, which has only disclosed assets but not flows, would continue to top the table for net platform sales across all channels. The quarter was bookended by the Woodford Equity Income suspension at the end of Q2 and its wind down, and the announcement Woodford Investment Management would be closing, in October.

The advised space had been shaken by the reduction in DB transfer flows, Fundscape said in a release. Transact has topped advised platforms for the third quarter running, which Fundscape attributed to service and an adviser-focused proposition.

Advised platforms account for 61.6% of assets under administration compared to 21.6% in D2C and the remainder in institutional.

Fundscape CEO Bella Caridade-Ferreira said: “The DB pension pipeline has all but dried up, leaving the platform industry exposed to the vagaries of political brinkmanship and low investor morale.

“Investors are sheltering their hard-earned cash from uncertainty and so sales are at all-time lows. With a general election in December and the EU exit deadline in January, 2019 will be one of the worst years on record for the platform and asset management industries.”

The report noted it was the worst quarter for flows since Q4 2012, when RDR was on the cusp of coming into force.

Caridade-Ferreira did not expect an improvement in platform activity until Brexit had been resolved. “Demand is still there; the fact that we’re grappling with Brexit doesn’t mean it has melted away. Investors are sitting on cash, so when the storm clouds finally lift, there could be a wall of money waiting to be invested.”

Source: Fundscape