Well, the covers are off and we now have full year 2018 data for the advised platform market. It’s been quite a year – if it was a box set we reckon it would be series 2 of The Wire. It’s been that gripping.
You’ll no doubt read lots of stuff about individual company results in the trade press, and if you work for a company which subscribes to our quarterly Platform Market Scorecard then you’ll be hearing much more from us very soon. But for now, here are a few of the things we think are interesting…
- The advised platform sector, as we define it, now looks after £375bn of real people’s money. That’s down just under 5% or £18bn from the end of Q3 2018, but still up 3% or so from 2017’s close at £363bn. Such is the sensitivity of platform AUA to market movements. We’ll most likely see the advised sector crest the £400bn wave at the end of Q1, if markets continue to rise and nothing weird happens. What are the odds of that, eh?
- Advisers piled over £68bn of new money into platforms in 2018. Again, this was down on 2017 (which saw the peak of the DB boom) of just under £80bn.
- With the mode average platform holding being about £150,000, and employing an advanced technique called ‘dividing’, that suggests that over 530,000 customers joined the happy happy platform world. That won’t be the real number, but when you do start to think about the number of customers this sector serves, it makes you think a bit more about the experience we offer them.
- Not every platform saw reduced gross sales compared to 2017 – Aegon ARC, True Potential, Raymond James, Transact and Parmenion all saw sales growth year-on-year.
- Away from figures, it was a remarkable year, with Transact, Nucleus and AJ Bell all going through their IPO. All three saw sales down on Q4 2017 and Q3 2018, but generally in line with the market, and share prices have stayed pretty well supported as markets have recovered in Q1 2019.
- We noticed (clever us) a real impact on new business flows for those large platforms who’ve been having a tough time with replatforming – and in fact in the main it was large shops which took the brunt of reduced flows in Q4 2018. The Aegon Platform (formerly Cofunds) was down over 80% in terms of gross sales compared to the same quarter in 2017, and Aviva was down nearly 25%.
- We think that firms sent flow instead to the medium and smaller independents: Seven IM, AJ Bell and Parmenion all benefitted from this, with great favourability scores in our adviser research.
- All in all, we end the year with the biggest platforms by purely advised AUA being:
- Standard Life/Elevate (£54bn)
- Quilter (£51bn)
- The Aegon Platform (£35bn)
- FundsNetwork (£33bn)
- Transact (£32bn)
A quick note on our data, which may differ from figures you see elsewhere. We use a cohort for the retail advised platform sector which represents, we think, very close to 100% of the platforms which are ‘open’ for independent advisers to use. As a result we exclude some platforms which are exclusively tied or vertically integrated which others include. We also work hard to strip away non-advised assets from the figures (we publish these separately for subscribers) – that’s why The Aegon Platform isn’t credited with its full AUA of nearly £90bn above. Institutional, workplace and direct are all out. We have to estimate that in some cases, because platforms can be a little shy sometimes, but that’s life.