Rise in business divergence seen in major supermarkets

Inflows into intermediary fund supermarket protagonists Cofunds and FundsNetwork's platforms reveal an increasing divergence in new business origins.

New Isa money made up 70% of FundsNetwork's inflows in January, compared to just 20% at Cofunds.

Conversely, some 80% of money going on to the Cofunds platform was generated through re-registration and transfer business, compared to just 30% at FundsNetwork.

While these figures could be taken to imply either FundsNetwork is achieving far greater cash sales or Cofunds is pulling in much larger swathes of transfer and re-registration business, the two platforms' underlying client bases could also explain a lot.

FundsNetwork's January sales break down as 76% intermediary and 24% direct. The direct market, in which Cofunds does not participate in, is typically more cash sales orientated. Also, Cofunds is understood to have a stronger presence in the discount broker market.

Many discount brokers have struggled to match last year's Isa sales let alone 2000's leading to a greater focus on consolidation.

Stuart Holah, head of intermediary sales at Fidelity, said monthly savings plans were FundsNetwork's fastest growing sales channel at present. Holah said this money typically has a higher retention rate given the platform offers Isa investors built-in diversification.

Rod Aldridge, sales director at Cofunds, said regular savers comprise around 13,000 of its 92,000 clients and are also a strong part of its business.

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