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Platform growth to continue despite end of DB 'sugar rush'

 

Platforms are going to continue to see growth, despite the "sugar rush" of defined benefit transfers ending.

Paul Boston, director of sales at Novia, said the increased inflows seen due to DB transfers would represent a "blip" in the wider story of growing assets under management on platforms.

Many platforms have seen inflows fall as the number of DB transfers goes down on the back of a crackdown by the Financial Conduct Authority.

Data from the Lang Cat showed assets on advised platforms grew by 4.5 per cent in the second quarter of this year to £418.4bn but net flows were down 1.76 per cent in the quarter to £5.2bn.

Speaking on the FTAdviser Podcast he said: "The assets on platforms continue to grow, it is the mainstay of the retail investment space. We don't see that changing at all and we are delighted with the growth rate we are experiencing."

Mike Barrett, consulting director at the Lang Cat, agreed: "More broadly and looking at longer term trends, the platform market has been pretty buoyant for a number of years.

"We track sales flows at the Lang Cat for every single advised platform and as an industry we have had 19 per cent growth since 2012 to 2018, which is pretty decent.

"We also have our annual house view of how that's going to go forward and our central view would be a growth rate of around about 14 per cent, so certainly down on the flows which platforms have enjoyed historically but still pretty healthy."

Mr Barrett said most advisers were "doing really quite nicely" which would continue to benefit platforms and drive their growth.

He also discussed, along with Mr Boston, whether there would be much innovation in the platform market and why platforms' profit margins are going down despite assets increasing.

Each week, FTAdviser is joined by guests from the industry to discuss the week in news and pressing industry issues.

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damian.fantato@ft.com