It has been said that the regulator’s move to bundled pricing and introduction of a sunset clause for legacy rebates, will present a major challenge to the major platform fund supermarkets.
Recent figures suggest, however, that this can be overplayed.
Royal London-owned wrap platform Ascentric reported net inflows of new assets under management of £392m, up 34 per cent on Q1 2012 and rising to almost £6bn following a threefold increase in joining adviser firms.
Mike Morrow, sales and marketing director at Ascentric, said figures for the second quarter could surpass its first quarter gains by as much as 10 per cent, citing increasing transfers from the big fund supermarkets.
He said: “It’s the highest it’s ever been in a quarter. It’s also that we are really starting to see assets... flow from Fidelity, Skandia and Cofunds. At the moment the story seems to be the movement off fund supermarkets to wrap platforms.”
These figures suggest the platform market as a whole is growing, rather than that a finite amount of assets are being shuffled between platform providers.
This supports figures from The Platforum, which showed that a big five platforms now represent around 70 per cent of overall platform assets, where once they accounted for more than 90 per cent.
But the undeniable increase in transfers does not necessarily mean a drop in assets for the big players. According to a spokesperson for Skandia, two-thirds of net flows have been on-platform and only one third has been off-platform in recent months.
The platform reported net inflows of £498bn in the three months to March 31 2013, about 10 per cent down on the £551m reported last year. This suggests despite around £500m being transferred off-platform over the period, it attracted around £1bn in new assets.
The spokesperson said: “It’s too early to be basing industry trends on first quarter figures. We have got half a billion [pounds] for the first quarter in one of the biggest disruptions of our time.”
As for the 10 per cent decline, the platform blamed this on uncertainty prompted by the Retail Distribution Review, indicating that expects this to rebound in the months ahead.
Mark Polson, principal of The Lang Cat, said: “We spend a bit of time helping advisers find the platforms that are right for them and... certainly the top three platforms the people want to leave are the fund supermarkets.
“[There are] a range of reasons but the most common reason they give is that the service quality has gone down considerably post-RDR.
“A number of unbundled platforms that have always been unbundled are finding it easy to make their case because they have always worked in this way. One of the things we council clients is not to make snap transitions. We always council people to run to something not from something.”
Despite observing the transfer trend, Mr Polson added that the pattern is not all “one way” traffic.
He said: “The fact remains that in terms of assets in play the biggest proportion are on fund supermarkets, but you could argue that is a representation of the market as a whole.
“The big three represent £140-150bn out of a total market size of £240-250bn. If you accept those figures it makes perfect sense that the majority of assets would be moving off the big incumbents.
“Skandia is getting a lot of ‘offs’ but are also getting quite a lot of re-reg on at the moment. It isn’t all one way. There are still advisers really favouring those platforms.”
