Financial consultancy firm The Lang Cat has reported that advised platform net sales are up 19% to £5.15bn ($6.4bn, €5.93bn) for Q1 2023, compared with Q4 2022.
But net sales have dropped 49% on Q1 2022 figures. The Lang Cat said that the £5.15bn recorded represents the lowest advised Q1 net sales total since 2019.
Advised gross sales (£17.73bn) were up on Q4 2022 (14%) but down 16% on Q1 2022. The Lang Cat said this was likely due to a tax year end related bounce in business for platforms.
All advised platforms experienced a growth in total assets during the first three months of the year as the FTSE 100 grew 3.55% over the same period.
In terms of company breakdown, the Lang Cat report also found that Quilter had the highest gross sales and True Potential had the highest net sales.
Abrdn is the largest UK advised platform by assets under administration (AuA), but Quilter is closing the gap, with both firms near to reaching £70bn.
‘As good as it gets’
Rich Mayor, senior analyst at The Lang Cat, said: “The increase in AuA will be welcome to all platforms that charge a percentage charge on assets, which is every advised platform in the UK. It’ll also mean a rise in percentage ongoing fees for advisers too. Both will be welcome after last year’s tumult.
“But what we’ve been thinking about is whether this represents ‘green shoots of recovery’ or a ‘false dawn’. Unfortunately, we think it’s likely the latter and that the bounce in sales this quarter is simply people using their subscription allowances. Platforms we spoke with reported a slow January and February, followed by a busy March.
“Outflows from advised platforms are at their highest on our records (£12.6bn) this quarter, up 11.5% from Q4, which leaves net sales comparatively lower than previous first quarter totals of recent years. Any bump in sales in the second quarter will likely be tax year end related.
“This might be about as good as it gets for platform flows this year, as all the same headwinds that faced investors last year remain. Even if the government makes good on its pledge to halve inflation this year, another interest rate rise is going to hit mortgage owners, and the cost-of-living crisis continues to bite and whittle away investable income.”
