Hargreaves and Cofunds top platform sales in 2016

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Hargreaves Lansdown and Cofunds topped platform sales in 2016, the latest Fundscape Platform report reveals.

Cofunds – now part of Aegon – topped the gross sales table with £7bn in the last quarter of 2016 at £20bn, more than double that of other major platforms such as Fidelity FundsNetwork, Hargreaves and Standard Life.

However, Aegon, which is currently migrating across legacy assets, reported net sales of £1.8bn in the fourth quarter, but over the course of the year it stood closer to Hargreaves, both generating net sales of £5.6bn.

Among the 19 UK platforms surveyed by Fundscape, net sales rose to £10.5bn in the fourth quarter, the highest level since the fourth quarter of 2015.

Annual net sales of £38bn were down 16 per cent on 2015’s figure of £45bn.

Fundscape chief executive Bella Caridade-Ferreira says: “Business in the fourth quarter was a little patchy, but there were signs investors are feeling much more bullish about the future. They’ve accepted that geopolitical uncertainty and low returns are here to stay, and life has to go on.

“A wall of cash has been building up over the year and that money is now starting to trickle in. 2017 should be a far better year… barring any major incidents that could knock us off course.”

At product level, Sipps accounted for 30 per cent of total assets, or £145.4bn, and 62 per cent of net sales, or £23.7bn.

Fundscape says this was thanks to the “unprecedented” boost given by defined benefit transfers.

Issa followed with 13.6 per cent of net sales, or £5.2bn.

Defined contribution pensions trailed list with only 9.4 per cent of net sales throughout last year.

Earlier this year, Money Marketing revealed money held in stocks and shares Isas “left the system” in 2016 as investors chose pensions over funds and platforms.

Caridade-Ferreira says DB transfers will create “a long pipeline of business” to platforms in the years ahead.

While more passive funds appeared in terms of platform sales, only the Vanguard Life Strategy 60% fund made it into the top 10 funds.

Overall, passive funds account for 6 per cent of total gross sales, and 9 per cent of total net sales of last year.

Caridade-Ferreira says: “Vertically integrated solutions such as Old Mutual and Standard Life have, understandably, much lower levels of passive activity. But passive business will mushroom on platforms that don’t have their own distribution arms. As a result, we expect to see fund business in 2017 bifurcate between passive and a clutch of ‘hot’ actively managed funds.”

Source: Fundscape