Platform assets are set to reach £1.4trn by 2022 according to Fundscape’s chief executive.
Bella Caridade-Ferreira says the platform industry is the go-to channel for pension and investment solutions and is on target to maintain its growth over the medium term regardless of regulatory, political and economic pressures.
Caridade-Ferreira says: “Despite Brexit and the regulatory headwinds facing the industry in the next few years, the platform industry is the de facto conduit for pension and investment solutions.
“As a result, platform growth is likely to continue in the same vein in the medium term. We expect platforms to evolve considerably as delivery and investment solutions become more tightly integrated. Taking into account various regulatory, political and economic factors, our realistic five-year projection is for platform assets to reach £1.4trn by 2022.”
In the third quarter of 2017 there was a typical pullback in platform use following a strong first half of the year, exacerbated by the political and economic uncertainty, Fundscape’s platform report shows.
However platform assets still grew by 3.6 per cent, up £19bn to £560bn on the back of pension money being put to work, both as a result of the pension freedoms and DB transfers.
According to Caridade-Ferreira, retail advisers are set to benefit most from the demand for pension advice, which accounts for 65 per cent of industry net sales in 2017.
Caridade-Ferreira says: “ISA activity was less pronounced in the third quarter but pensions picked up the slack, generating around 70 per cent of platforms’ net flows.”
The top three platforms in terms of assets are Cofunds, Hargreaves Lansdown and Fidelity. Overall they account for 45 per cent of the industry assets and each have over £75bn in assets, Fundscape’s Q3 figures show.
Although gross and net sales in fell slightly in the third quarter to £30bn and £13bn respectively, platform sales remain high in a historical context, the report says. Year-to-date gross and net sales of £93bn and £42bn are 38 per cent and 50per cent higher than over the same period in 2016.