Investment platform sales plummeted to £4.4bn in the third quarter of last year, the lowest they have been in over a decade as an uncertain economy and political instability spooked investors.
Net sales across all platforms, both advised and non-advised, have been on a downward trajectory since January.
They fell from £11.9bn in the first quarter to £7.8bn in the second quarter, according to Fundscape data published today (November 10).
Gross sales were also the lowest seen since the end of 2016 at £26bn.
Overall, markets have wiped £105bn of assets off all platforms’ balance sheets so far this year.
Total platform assets were down 1.36 per cent in Q3, though advised assets were down slightly less at -1.1 per cent over the same period, according to the Lang Cat’s quarterly platform market scorecard also published today (November 10).
Fundscape said the dip across the board in assets this year has had an "inevitable impact on platform revenues".
However, the firm also said the rise in the interest rates and cash holdings on platforms will help boost flagging revenues.
Apart from True Potential, all other adviser platforms experienced drops in flows in the third quarter.
Rich Mayor, senior analyst at the Lang Cat, said new money continues to fall leaving net sales numbers “looking precarious”, but that advised platforms’ outflows remain steady.
According to Fundscape, True Potential topped both net sales during this period with £1.2bn and Quilter topped gross sales with £1.7bn.
“With the UK in recession and likely to remain so for at least a year, it will be a bumpy ride for the platform industry as the world adjusts to a new normal of higher inflation and lower disposable income. Consumers will need a lot of support over the next couple of years,” said Fundscape chief executive, Bella Caridade-Ferreira.
“Vertically integrated platforms are adept at supporting both advisers and consumers - other platforms may need to take a leaf out of their books.”
Currently, Abrdn’s assets under management sits at the top of the table at £66.93bn, followed by Quilter at £64.63bn.
Mayor reckons sales numbers are unlikely to pick up much in 2023.
He explained that in 2021, vaccinations paved the UK's way out of the pandemic, leading to buoyant markets and built up cash being invested. This fuelled record sales last year.
“But all the asset growth from the past year has been wiped away and this time there’s no clear way out," he said. "The current high inflation, high tax, high interest rates environment means there’s not going to be anything like the flood of platform business we saw in 2021.
“As one adviser told us, the conversations with clients seeing value wiped off their assets are getting more difficult each month. If that continues until the spring, more will want to take some sort of action to feel some control.