2018 was a tough year for the adviser platform sector as a whole but, asks Tom Ellis, amid the general suffering, are net-flow figures suggesting a shift in the balance of power among the most popular players?
Aviva recently published its net platform flows for 2018 and they did not make for pleasant reading - net business dropped from £6.2bn in 2017 to just £3.8bn in 2018.
This was a year in which the business struggled to get to grips with a multitude of issues on the new platform it transferred all advised clients to and launched last January, and there is hardly a better measurement by which to judge how in-vogue a platform is with advisers than its net flows data.
Let's not be too quick to pass judgement, however - according to Fundscape figures, net sales for the sector as a whole in 2018 were £10bn down on 2017, sinking from £54.6bn to £44.6bn - a fall of some 18%. In that light, Aviva's 38% drop does not look quite so horrific.
Certainly others struggled too, and a tough 2018 for platforms has thrown the battle for adviser market supremacy up in the air. Aegon, Aviva, Old Mutual Wealth and Standard Life dominated advised platform flows throughout 2016 and 2017 but 2018 saw the picture changing.
Despite its acquisition of Elevate, for example, Standard Life's star seems to be on the decline compared with its peers after its net sales suffered a whopping 40% decline year-on-year, according to Fundscape.
Fundscape's data says the business was comfortably top of the adviser platform leader-board for net flows from 2015 to 2017 but the gap between it and AJ Bell, Aviva and Transact is now more akin to that between Liverpool and Manchester City at the top of Premier League.
For its part, Aviva, which was fourth in the net flow tables for 2015 and second in 2016 and 2017, dropped down to a joint-third in 2018. Meanwhile the Old Mutual Wealth platform, after achieving the fourth-strongest flows in 2016 and 2017, dropped out of the top five in 2018.
Mind you, if there are some big names suffering, then who are the upstarts applying the pressure? Well, AJ Bell for starters. Its net flows in 2018 were up some 25% on 2017, jumping from £3.2bn to £4.0bn. This sees the recently listed platform, almost unbelievably, second in the charts for advised net flows in 2018. This is a meteoric rise from a platform business that was eighth for net adviser flows in 2015 and sixth in both 2016 and 2017.
Transact - that ever-present and often considered advisers' reliable friend - has been steadily creeping up the net flows leader-board over the last few years. It was at the bottom end of the top 10 for net flows in 2015, before rising to seventh the next year, then fifth in 2017 and now fourth in 2018.
On the face of it, then, intra-business disruption would appear to have encouraged advisers to begin to shun platforms. Heavyweights Aviva and Old Mutual Wealth, for example, have both been embroiled in tough re-platforming projects over the last few years.
And, when it comes to Standard Life, the investment and life giant has been working hard to integrate the Elevate platform it bought from Axa back in 2016 and has more recently seen its parent company go through a heavyweight merger with Aberdeen Asset Management.
That said, disruption has also been the name of the game for contemporary winners AJ Bell and Transact - just of a different kind. Both publicly listed in 2018 and the strategy now seems to be paying dividends for them. Pun barely intended.
Could it be that advisers are starting to direct client money away from the life company platforms that have traditionally dominated the space and instead are looking more favourably on the so-called ‘independent' players? The tides may be changing.
Tom Ellis is news editor of Professional Adviser
He is a regular contributor to Professional Adviser's sister title Multi-Asset Review, the next issue of which is out soon. To make sure you receive your copy, please register your interest here
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