Platform sales drop to two-year lows post Brexit

Technology Computer Binary

Investment platforms have reported their lowest net sales since 2014 in Q2 as investors cashed out in the weeks before the Brexit vote, a report surveying 19 platforms has found.

The latest Fundscape Platform Report, published today, said net sales fell to £9.57bn in the second quarter of 2016, down from £9.6bn in the first quarter.

This was the biggest drop since the third quarter of 2014, when sales were £8.8bn, the report finds.

Hargreaves Lansdown was the top platform for net sales in Q2.

Fundscape chief executive Bella Caridade-Ferreira says: “Investors lost their nerve in the final weeks before the Brexit vote and cashed out. Platforms without decent cash facilities would have felt the pain more keenly.”

However, Hargreaves Lansdown reported £1.8bn net sales for the period, down from £3.2bn in the first quarter of 2016.

The D2C platform was followed by Aegon and Standard Life, with £1.3bn net sales each, Zurich, and Aviva with £1bn and £900m respectively.

Despite lower sales, platform’s asset growth expanded by £20bn to £432.5bn with Alliance Trust topping the list with asset growth of 39.6 per cent to £3.4bn mostly thanks to its recent acquisition of Stocktrade.

Aegon, which announced its acquisition of Cofunds last week for £140m, reported assets of £1.52bn, a rise of 20.5 per cent during the quarter.

Thanks to the deal, Aegon estimated its total assets will reach £110bn by the end of the year.

Pension flows also “maintained momentum” for the same period, the report says. Pension, Sipp and workplace savings accounted for £6.5bn of net flows, the report says.

Caridade-Ferreira says: “Pensions saved the day in the second quarter. Net ISA sales were down 79 per cent on like-for-like sales in 2015, so it’s been a painful ISA season for the industry.

“The Brexit vote is unlikely to change this, so sales patterns in the second half of the year should be similar”.