Sales on platforms dipped to their lowest level in nearly two years, as investors decided to take shelter in cash and safe products in light of June’s referendum.
According to the Fundscape Platform report, looking at the first half of this year, net sales on platforms dropped to under £9.6bn, which is the lowest total since the third quarter in 2014, when sales hit £8.8bn.
Bella Caridade-Ferreira, chief executive of Fundscape, said investors “lost their nerve” in the final weeks before the Brexit vote and cashed out.
“Platforms without decent cash facilities would have felt the pain more keenly,” she said, adding the first six months of the year was challenging for fund groups and platforms alike.
Despite lower sales, asset growth for the second quarter of this year was comparatively strong, with total platform assets swelling 4.8 per cent to £432.5bn at the end of June.
The year-to-date total saw assets expand by 7.5 per cent.
Alliance Trust and Aegon were the platforms which provided the biggest boost in assets.
TOP 5 PLATFORMS BY ASSETS IN Q216 (£bn) |
| TOP 5 PLATFORMS BY ASSET GRTH IN Q216 (%) | |||
Cofunds | £77.5bn |
| Alliance Trust | £3,404 | 39.6% |
Fidelity | £64.2bn | Aegon | £1,522 | 20.5% | |
Hargreaves Lansdown (est)* | £62.6bn |
| Aviva | £925 | 10.3% |
Old Mutual | £37.7bn |
| Zurich | £1,569 | 9.2% |
Standard Life | £28.9bn |
| Hargreaves Lansdown (est)* | £3,187 | 5.4% |
Last week, the Dutch provider announced it will buy Cofunds by the end of the year, which will see its assets balloon to around £110bn, taking it to the top of the assets under administration table.
According to the report, net Isa sales were down 79 per cent on like-for-like sales compared to 2015, as Brexit scared off many investors who chose to hold off until after the referendum.
Ms Caridade-Ferreira said pensions “saved the day” in the second quarter, adding it has been a “painful” Isa season for the industry.
Pension, Sipp and workplace savings together accounted for £6.5bn of net flows, which the Fundscape boss said proved that investors tend to be more resilient and pragmatic when investing for the long-term.
She added: “The Brexit vote is unlikely to change this, so sales patterns in the second half of the year should be similar.”
Patrick Connolly, certified financial planner at Chase de Vere Independent Financial Advisers, said the number are not a surprise.
“Too many investors make decisions based on short-term sentiment rather than taking a longer-term approach.
“The result is that they too often invest near the top of the market when sentiment is positive but when investment gains have already been made.”
katherine.denham@ft.com
