Figures from consultancy firm's Q1 2018 Platform Market Scorecard showed pension gross inflows to platforms were down 16 per cent on Q4 2017 compared to an overall drop of 5 per cent in total sales across all investment wrappers.
The Lang Cat said the fall had been caused by a combination of professional indemnity issues for advisers, a lack of clear direction from the regulator, platforms taking stock about how compliantly they compete for business and transfer multiples dropping.
Total platform assets under management increased 7.1 per cent year on year in the first quarter to £494bn, with a 12 per cent growth in the advised segment to £371bn.
Terry Huddard, market analysis manager at the Lang Cat, said the scorecard also highlighted the fact new Mifid II rules made it harder to justify moving existing clients to new platforms.
"We believe there is opportunity to use the legislation to help build more defined client solutions and for providers to make it really clear who their propositions are designed for," he said. "We don’t think it’s impossible to still have a single platform for all clients, but it is becoming more difficult."
The FCA recently published new guidance on pension transfers as well as a further consultation and is now seeking views on topics such as the role and qualifications of pension transfer specialists, how to define a pension transfer.
It is proposing that a pension transfer specialist must hold the relevant qualifications for advising on investments before they can advise on or check pension transfer advice.
Adam Rutter, an adviser at Finlay & Co in Dundee, said: "I would say demand is about the same. However advisers doing this type of work are tightening their procedures and criteria due to ever changing demand from the FCA.
"Also professional indemnity insurers are are changing their criteria, making it harder and more expensive to get cover for DB transfer work. This in turn has a consequence for the client in potential higher fees."
Alistair Cunningham, chartered financial planner from Wingate Financial Planning in Caterham, Surrey, said he had "definitely" received fewer enquiries about DB transfers since 2017's high.
He said: "It's also notable the tone of mainstream media has changed from 'now is the time to cash in' to 'did I make a mistake?'. That's a lot to do with it."
But Andrew Macintyre, financial consultant at Alan Steel Asset Management, said there was still appetite from consumers.
He said: "I do not think the demand for DB transfers is going to abate any time soon. The regulator has this area firmly in its crosshairs but the large firms that are able to put robust processes and controls in place for DB transfers should continue to be able to operate in this field.
"I would expect the number of firms advising in this area to decline but would watch for the larger players actively scaling up resource and systems to meet the huge demand."
