The assets held on platforms were salvaged by record new business in Q1 and a surprise boom in Q4 as 2020 was “bookended” by activity at the start and end of the year, according to a report.
Figures from Fundscape UK’s platform report show platform assets under management hit £785bn at the close of the 2020, up 9 per cent year-on-year.
The £64.8bn increase was partly down to net sales of £36bn — more than the £29bn recorded for 2019 but less than the £45bn pumped onto platforms in 2018 — while positive market movements accounted for the rest of the jump.
Fundscape’s report said 2020 was a year of “huge swings” in activity in the platform industry.
It said: “Records were broken for new business in the first quarter, but news of Covid-19 and the pandemic sent stock markets spiralling out of control and sales shuddering to a halt.
“The rest of the year looked even more dire than 2019 until that week in November when unexpected US election results and successful Covid trials were announced in the same week.
“Stock markets soared, and sales in the fourth quarter were buoyant and better than like-for-like sales in 2019.”
Throughout the summer months, flailing stock markets and stunted gross sales had led to some “perilously low” net sales figures, according to the report.
Bella Caridade-Ferreira, Fundscape CEO, said: “As well as having to figure out how to securely run financial services from thousands of living rooms and bedrooms, platforms and investment managers were also affected by poor investor sentiment.
“The net effect was that sales were decidedly sluggish in the second half of the year.”
Caridade-Ferreira said a week of good news in November was a “significant boost”, with the UK government rolling out a rapid vaccination programme.
She added: “This will work wonders on investor sentiment and will have a benign impact on the Isa season. As a result, we expect the first half of 2021 to be home to buoyant sales.”
Nearly half of the assets held on platforms (44.7 per cent) are held in self-invested personal pensions, accounting for £351bn, while £50bn is in defined contribution schemes.
Consumers invested £45bn into Sipps throughout the year while DC pensions saw £10.5bn of net inflows.
Meanwhile, Isas had a bumper year, with net flows of £5.6bn — up from £3.2bn last year — bringing the total of assets held in Isas on platforms to £187bn.
imogen.tew@ft.com
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