Advised platforms hit an all time high of outflows, at £14bn in the third quarter of 2023, prompting warnings there will be a "slow and fragile" recovery next year.
According to data from the Lang Cat, published today (November 16), this was up more than 12 per cent on the previous quarter's figures £12.3bn.
It comes as people withdraw cash as they struggle to keep up with the cost of living crisis.
Overall total outflows from advised platforms stand at £38.1bn for the year to date, compared with £29.2bn for the same period in 2022 - a 30 per cent increase.
Net sales were also at a record low of £1.7bn in the quarter, having fallen further from the previous quarter.
The combination meant there almost no asset growth for advised platforms, of just 0.06 per cent (from Q2) to end the quarter at £545.96bn.
Quilter maintained a lead with £69.65bn assets under administration (AUA) followed closely by Abrdn with £68.46bn.
Rich Mayor, senior analyst at the Lang Cat, said: “Advisers are telling us there are two main drivers; clients are withdrawing more to cash savings and also to cope with the cost of living. The responses from advisers are consistent with the conversations we’re having with platforms too.
“Retirement plans and sums needed are likely to have increased due to inflation, cash interest rates are the highest they’ve been for years, as are annuity rates. All of this combines to create a perfect storm for advised platforms.”
“The question now is ‘are we at the peak of this activity?’ and we think yes, just about. The fourth quarter is likely to be similar to this one, but with interest rates steady, cash and annuities rates have likely hit a high point."
Mayor added: "It’s likely that 2024 will be the start of things turning back to something like normal for platforms. But the journey will be slow and recovery fragile.”
tara.o'connor@ft.com
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