Fund figures show decline in platforms’ dominance

Platforms’ retail distribution dominance has declined in the past year, according to the latest Investment Association figures.

In January, intermediaries including IFAs and wealth managers made gross retail fund sales of £8.1bn, representing an increase in market share of nearly 10 percentage points year-on-year, to 35.7 per cent from 27.4 per cent in January 2017.

However, the new data is a blow for fund platforms, the IA says, as gross retail sales totalled £8.3bn, representing a decrease in market share to 36.7 per cent from 45.8 per cent in January a year ago.

IA fund market specialist Alastair Wainwright says: “Looking at retail distribution, we have been seeing a slow but steady reduction in fund platforms’ dominance throughout the past year.

“A number of factors may be driving this shift such as non-advised investors turning to financial advisers or advisers moving off platforms and investing directly with fund managers.”

Elsewhere in the IA fund sales data, fixed income funds continued to top the best selling chart for the start of 2018.

Despite the January sell-off, bond funds attracted £1.6bn net retail inflows, followed by equity funds with £977m and multi-asset funds, which attracted £941m.

Ignoring the risk of rate hikes in the UK, investors picked the Sterling Strategic Bond sector as their favourite by pouring in £808m. Wainwright notes that these funds are able to avoid interest rate risks thanks to their global exposure and the ability to protect from foreign exchange risk.

Passive fund sales were also high at £861m, with passive equity funds collecting £533m for the period.

UK funds continue to lag behind other major markets as outflows hit £532m in January. Investors continued to pour money into global funds instead as inflows reached £354m.

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  1. Heather Hopkins 8th March 2018 at 3:03 pm

    Is it possible this shift is a result of take up of the pru fund and other life co propositions, such as Royal London for drawdown? I know some advisers also use Vanguard’s direct proposition for some clients.

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