More than £200bn ‘in flight’ on advised platforms

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More than £200bn in advised platform assets are up for grabs due to acquisitions and replatforming, research suggests.

A report by The Lang Cat says around £207bn in assets are “in flight” because of upheaval in the platform market.

The report says: “This figure is a result of a combination of the takeovers currently being carried out and the scale of replatforming taking place in the market.

“It’s also an indication of the volume of advisers that are faced with uncertainty as a result of this replatforming.

“But overall, the sheer size of this figure reflects the fact that the UK platform market is going through a period of major transition, with so much in flux as no one yet knows whether the various deals and tech switches that are already underway will lead to positive outcomes for advisers and their clients.”

Recent consolidation in the platform market has included Aegon’s purchase of Legal & General-owned Cofunds for £140m in August, while the likes of Old Mutual Wealth and Alliance Trust Savings have been in the midst of replatforming projects.

Assets under administration on advised platforms grew 18 per cent in 2016, slightly down from 20 per cent the previous year. The Lang Cat attributes some of the rise to pension freedoms, but says “critical mass is likely to be some way off” for the sector.

Margins continue to be squeezed however, as total net profit for advised platforms in 2016 came in at £31.86m, down from £33.88m for the previous year.

The ratio of all inflows minus outflows to the total amount invested on the platforms also dropped from 66.7 per cent in 2015 to 62.7 per cent this year.

The Lang Cat says this illustrates “platforms are having to work harder to keep inflows in a healthy positive position.”

Average prices for Isa and GIA wrappers ranged from 0.3 per cent for £100,000 investments to 0.26 per cent for £500,000 investments. For pension wrappers the figures ranged from 0.38 per cent to 0.28 per cent.