Purchases of investment trusts by financial advisers and wealth managers in 2015 have almost tripled annual sales levels reported before the Retail Distribution Review (RDR).
Research from the Association of Investment Companies revealed that adviser purchases of investment trusts totalled £686.9m in 2015, an increase of 43 per cent against the previous year’s figure of £479.5m.
The data, gathered by research firm Matrix Financial Clarity, found 2015 purchases were nearly three times more than 2012’s pre-RDR level, where it stood at £236.6m.
The RDR ban on commission payments put investment trusts on a level playing field with their open-ended counterparts.
Despite investment trust purchases being bolstered by the launch of the popular Woodford Patient Capital trust in April last year, Mr Sayers said it would have been a strong year without it.
He pointed out that by removing the second-quarter figures, purchases for 2015 were still up 17 per cent to £415.1m, against £353.9m throughout the same three quarters in 2014.
The most popular sectors in 2015 mainly reflected the demand for income, with the Global investment sector topping the list at 16 per cent, UK Equity Income coming second at 12 per cent, and UK All Companies coming third with 10 per cent.
During the whole of 2015, Transact remained the most popular adviser platform for purchases of investment companies, with a market share of 48 per cent.
Alliance Trust Savings has taken second place with 18 per cent of the market, and Ascentric is now in third place with 16 per cent of the market.
Adviser view
Nic Round, chartered financial planner at Trēowe Wealth Advisers, said: “In some respects, the increase has nothing to do with the structure of investment trusts compared to open-ended vehicles, otherwise the advisers would have been using investment trusts previously.”
He added: “The rise therefore must come from other factors,” suggesting platform development to allow investment trusts or lower costs might have made them more attractive.
katherine.denham@ft.com
