Platforms saw slow Q1 as investors held back
Platforms have had a sluggish first quarter with the pension reforms and general elections taking their toll, Fundscape chief executive Bella Caridade-Ferreira has said.
According to the investment consultancy’s research, investors held off on where to place their money until the general election was resolved.
Pensions also played a role, with the research stating that the pensioner bonds diverted attention.
However, preparing for pension freedoms kept platforms and advisers busy during the quarter.
“The combination of politics and pensions made for a sluggish first quarter, dampened by Grexit fears on the continent. Gross flows were robust, but as indicated by net flows, there was more switching than usual and less new money overall,” Ms Caridade-Ferreira said.
During Q1 platform assets under administration rose by £26.5bn to £370.8bn, the research revealed. Since March 2014 assets grew by £67bn.
Gross sales were down on Q4 of 2014, from £22.1bn to £21.4bn, but stronger than like-for-like sales in 2014 by £19.9bn.
However, net sales fell below last quarter’s net sales of £12.1bn, at £9.3bn.
Top three platforms by assets, Q1 2015 (£bn) | |
Cofunds | £76.1bn |
Fidelity | £61.1bn |
Hargreaves Lansdown (estimated) | £51.5bn |
Source: Fundscape
Adviser View
Bob Wilson, financial adviser at Norwich-based GreenSky Wealth, said: “The findings make sense especially as no-one expected the result of the election. If the Conservatives had been expected to win perhaps we would have seen more investment inflows but it was very much in the balance, and there was that uncertainty with the pension freedoms. If you are low-risk, the pensioner bonds are the attractive option, hence the huge inflow.”
