DIY and robo platform assets fall 2.7%

DIY and robo platform assets fall 2.7%
Photographer: Paul Thomas/Bloomberg

Assets on DIY and robo investment platforms fell 2.7 per cent in the first quarter of 2022, with experts expecting this fall to continue with global market corrections “dragging portfolios down” following a poor Isa season.

According to data published by Boring Money yesterday (May 25), Vanguard was the only DIY platform to buck the decline in assets, growing by 9 per cent or £1bn over the quarter.

Meanwhile, the data suggested all other DIY and robo advice platforms fell in line with the majority of advised platforms - a market where all but one platform saw their assets shrink too.

“It continues to be an extreme time for DIY investment providers,” said Boring Money chief executive, Holly Mackay.

“In 2020, it was a story of plague and pestilence, before moving into a Renaissance period towards the end of that year and into 2021. 

“We are now firmly in the era of war and economic hardship and the start to 2022 has been disappointing for most, who have fallen well short of targets pegged to 2021 activity.”

Many platforms, the data showed, struggled with poor Isa seasons. It cited Hargreaves Lansdown, which recorded £2.5bn of net new business in the four months to April 30, 2022, down from £4.5bn over the same period last year.

Boring Money reckons assets across DIY and robo platforms are expected to continue falling into the second quarter of this year, with global market corrections dragging portfolios down.

But despite the fall in assets, analysts have said Hargreaves is still a stock worth buying - largely because of its customer retention, highlighting how the typical client will remain with Hargreaves for over 25 years.

In terms of new customers, Hargreaves’ sign-ups were two-thirds lower in the first fourth months of this year compared with the same period in 2021.

Across the market, customer account numbers rose by 4.4 per cent, slightly below the previous quarter’s 4.8 per cent growth and significantly below the 9.6 per cent rise in the first quarter of 2021.

There is now an all-time high of 9.45mn customer accounts in the DIY and robo market, with some 1.5mn of these opened in the past 12 months. 

According to Boring Money’s research, a robo adviser was discerned as a service which is questionnaire-based, low-cost and no direct access to an adviser.

The macro research spanned 25 investment platforms across both these sectors.