This year is set to be “many times worse” for the platforms industry which is coming off a challenging 2019 as the coronavirus throws global markets into turmoil.
Data compiled by Fundscape shows the platform industry was on shaky footing last year thanks to geopolitical uncertainties, Brexit and a slowdown in DB transfers.
Net sales figures for the year of £29.7bn were the worst since 2013 and accounted for just over a quarter of total asset growth as investors waited for clarity around the UK’s divorce from the EU.
Although assets across the industry grew by 19% or £112bn, quadruple the £30bn achieved in 2018, most of this was down rising asset values.
There is no doubt 2020 will be many times worse than 2019
But with the coronavirus pandemic sweeping the globe Fundscape CEO Bella Caridade‐Ferreira (pictured) said things are about to get even grimmer for platforms for the foreseeable future.
“2019 will pale into utter insignificance compared to the bloodletting we’re going to experience in 2020,” said Caridade‐Ferreira.
“What we thought was the light at the end of the tunnel has morphed into a train roaring down the track towards us at terrifying speed. The coronavirus will have a deep and long impact on the world and the global economy. There is no doubt that 2020 will be many times worse than 2019.
“Given the spread of the disease, it’s unlikely that 2021 will be any better either,” she added.
Hargreaves still dominates D2C sales
Last year Fidelity’s Fundsnetwork was the only platform to record a year-on-year rise in net sales, according to Fundscape’s figures.
True Potential, which manages £10bn in assets, “stood out” for growing 35% last year, which was faster than larger firms like Hargreaves Lansdown and AJ Bell, up 23% and 27% respectively.
For the year Hargreaves was still the top D2C platform by net sales, raking in £6.6bn, followed by Aegon which brought in £4.6bn and AJ Bell at £4.1bn.
Transact was the leading adviser platform last year with £3.6bn in net sales.
While Transact topped sales charts in the first three quarters it was outgunned by Aviva in Q4 19 as it saw “exceptionally strong flows” of £1.2bn after recovering from its re-platforming issues. In total Aviva’s advised platform saw net sales of £3.5bn.
