Net flows into advised platforms reached a record low in the last quarter of 2022, the Lang Cat research shows.
The consultancy firm said Q4 2022 was the “worst quarter” since its records began in 2016.
Just £4.3bn ($5.3bn, €4.82bn) in net flows was added in the last three months of the year, compared with £9.7bn in Q4 2021 and £5.5bn in Q3 2022. Gross sales were also down to £15.6bn in Q4 2022 (£20.4bn in Q4 2021).
For the whole of 2022, total advised platform assets were down 6% – around £34.9bn year-on-year. Annual sales shrunk 31.1% Y-O-Y and gross flows also fared poorly as they fell 15.7%.
Despite disappointing net flows, the Lang Cat found that total assets recovered in the last quarter of 2022, with a 3.8% increase.
Rich Mayor, senior analyst at the Lang Cat, said: “The last quarter of 2022 is the lowest net sales for advised platforms on our records and rounds off a tough year for platforms. 2021 saw long-standing sales records beaten repeatedly for the right reasons, but 2022 has seen advised platforms reach new lows collectively for net sales.
“Although there’s some positivity in asset trends in the final quarter, which bring a welcome boost for platform and adviser ongoing fee revenues, gross and net sales continued to fall throughout the year. But while assets grew in Q4 for the first time in 2022 thanks to recovering stock markets, the falls in every other quarter means total advised assets at the end of 2022 are down just shy £35bn against the end of 2021.
“One cause contributing to these low numbers is less new money being placed on platforms due to the macroeconomic landscape in the UK. The other is a steady stream of outflows, which have been around the £10bn-£11bn per quarter mark since the UK emerged from the worst of the pandemic. Retirement plans that were delayed by the pandemic were put into action into 2021 and platforms have had a steady level of outflows since.
“That’s okay when you’re able to bring new business to replace it, but that amount of business is simply not there for most platforms at the moment.”
