The Lang Cat: Advised platforms suffer record outflows in 2023

Outflows increased by 36.3% compared to 2022

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Assets held across 21 advised platforms in 2023 suffered the highest outflows on record, according to research from The Lang Cat, with more than £53.2bn being withdrawn throughout the year. This is a 36.3% increase from 2022, when outflows reached £39bn.

Outflows between Q3 and Q4 last year increased by 6.9% at £13.9bn. Q4 outflows alone increased by 51.1% compared to the same quarter last year, when outflows reached £9.9bn.

In contrast, advised gross sales ticked up by 1.9% between Q3 and Q4 last year to £15.8bn, while they increased by 16.5% compared to Q4 last year’s sales of £13.8bn.

Gross sales for the year stood at £63.4bn, a 2.5% fall compared to last year’s gross sales of £65bn.  

On a net basis, however, Q4 sales reached a record low for the third consecutive year at £1.2bn – this marks a 70.1% fall compared to net sales in Q4 2022, and a 35.8% fall from Q3 2023. Net sales for the year reached £10.2bn, marking a 60.7% fall compared to 2022’s net flows of £26bn.

In terms of asset growth, total advised assets in Q4 last year were up 9% compared to the same quarter during the previous year, while assets increased by 5.3% between Q3 and Q4 2023 to £546bn.

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Rich Mayor, senior analyst at The Lang Cat, said the last quarter of 2023 “rounds off the dominant theme of rising outflows hammering net sales” in the advised platform market.

“Gross sales have been steady throughout, but the wider economic conditions mean more money has been taken out of platforms in 2023 than in any other year, with ISAs and pensions bearing the brunt of it,” he explained.

“The results show that the cost-of-living crisis meant financial plans had to be adjusted for a good portion of clients. The main reasons cited were investors supporting themselves and family members with the increase in household expenses, followed by concerns over capital preservation in volatile markets.

“On the latter point, we’ve also noted a shift in advisers’ retirement income strategies, with an increase in the use of annuities for more risk-averse clients.”

Full findings of The Lang Cat’s report, State of the Advice Nation, is due for publication later this week.

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