Platforms accused of pulling the wool over assets

Platforms accused of pulling the wool over assets

Platform providers have been accused of attempting to secure inflows from advisers using asset under management figures which could inflate the perception of the level of retail business they are conducting.

Most platforms quote total figures when quoting the scale of their business, without separating what is institutional, from retail assets brought through advisers. In the case of the largest firms, much of the institutional business will come from in-house funds.

Advisers are now required to undertake extensive and ongoing due diligence on platforms they wish to include in their client process, typically including a review of ‘financial strength’ and even an assessment of likely commitment to the market, based on new business.

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Colin Turton, director of AdviserAsset and an industry commentator, said simply: “They are quoting big total numbers and they don’t want people to know how much is institutional compared to retail.”

Cofunds, which has been cagey on this point in the past, has bucked the trend and disclosed its asset breakdown in results published by parent Legal and General last week, revealing it has £76bn in total assets, of which £38.8bn is retail and £37.2bn institutional.

Old Mutual told FTAdviser at the end of 2014 it had UK retail advised assets of £30.8bn, up 13 per cent since 2013. Of this, a spokesperson confirmed that none of this is institutional.

However, data provided to Money Management for its annual platform report in August 2014 quoted a single total assets figure of £80.2bn.

An Old Mutual spokesperson said this is “now over £100bn, although the make-up of our business has changed somewhat”. The total figure includes assets held in Old Mutual Global Investors funds and would include a “very small amount” of institutional, the OM spokesperson said.

Fidelity has £56.7bn of assets under administration, but the platform told FTAdviser it does not separate institutional from retail - and again would include Fidelity’s fund assets.

A Fidelity spokesperson said: “I can confirm the AUA figure quoted is for Fidelity’s UK platform, which includes all Fidelity’s retail fund assets, retail assets held on Fidelity Fundsnetwork and retail and institutional assets held on the Fidelity DC Investment Platform.

“I’m afraid we don’t separate the figures, so aren’t able to supply you figures just for institutional business.”

The numbers complicate the picture presented by Fundscape, whose latest data for the last three months of 2014 showed platforms held £203.7bn of retail advised assets and £71.4bn of institutional assets. Fundscape data show total assets, including direct-to-consumer, of £343.7bn.

Other platforms remain shy in revealing institutional assets.

After Cofunds, Ascentric holds the most institutional money, according to Fundscape. Royal London’s results, published today, showed that Ascentric’s platform reached £9.5bn in assets under administration at the end of the first quarter, a 7 per cent increase on the end of 2014.

Ascentric’s parent company IFDL, owned by Royal London, also operates in the institutional platform market. According to an Ascentric spokeswoman, the institutional money held (the figure still unknown) is not in the “traditional sense”.