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Platform data hints at end of pension transfer ‘boom’

The end of the “boom” in pension transfers could be in sight, consultancy the Lang Cat predicts.

The Lang Cat has published its latest platform market scorecard, which found pension gross inflows to platforms dropped 16 per cent in the first quarter of 2018 when compared to the fourth quarter of 2017.

This was compared to an overall drop of 5 per cent in total sales across all investment wrappers.

The Lang Cat attributes the slow down in sales to issues with advisers’ professional indemnity cover, a lack of clear direction from the regulator, dropping transfer multiples and platforms considering how compliantly they can compete for business.

The analysis found total platform assets increased 7.1 per cent from the first quarter of 2017 to the first quarter of 2018 to £494bn.

There was 12 per cent growth in the advised segment to £371bn over that period.

Advisers urged to catch up on new product governance rules

Lang Cat market analysis manager Terry Huddart says the FCA’s new product governance rules will impact platforms because advisers will be subject to a greater onus to evidence platform selection by client segment.

Huddart says: “We believe there is opportunity to use the legislation to help build a more defined client solution and for providers to make it really clear who their propositions are designed for. It is usually much more realistic for firms to appoint a strategic platform panel than assess each client on price against each platform.”

He says: “Although most do operate in that way, many advisers will still find client justification onerous. PROD therefore has the potential to help underpin strategic panel selection. We don’t think it’s impossible to still have a single platform for all clients, but it is becoming more difficult.”

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