Evaporating defined benefit (DB) transfers and high political uncertainty have made 2019 one of the worst years on record for platform sales, consultancy Fundscape's third quarter results show.
Platform industry assets saw a 2.5% increase to £691.3bn, despite stock markets flatlining during this period, but sales played a small part in asset growth.
Gross platform sales totalled £27.4bn, the lowest in three years, and net sales fell to £6.6bn, its lowest since Q4 in 2012 as the Retail Distribution Review came into effect.
Geopolitical uncertainty from Brexit and the US-China trade war led to investor withdrawals rising at a faster rate than inflows, resulting in a 24% gross sales ratio.
Fundscape chief executive Bella Caridade-Ferreira said the reduction in DB transfer flows has shaken up the retail adviser platform rankings, with Transact topping retail sales at £891m and True Potential in fifth position at £442m.
"The DB pension pipeline has all but dried up, leaving the platform industry exposed to the vagaries of political brinkmanship and low investor morale," she said.
"Investors are sheltering their hard-earned cash from uncertainty and so sales are at all-time lows. With a general election in December and the EU exit deadline in January, 2019 will be one of the worst years on record for the platform and asset management industries."
Fundscape estimated that Hargreaves Landsdown would continue to top net platform sales across all channels.
Caridade-Ferreira said she did not expect platform sales to improve until there was more certainty around Brexit.
"Demand is still there - the fact that we're grappling with Brexit doesn't mean it has melted away," she said.
"Investors are sitting on cash, so when the storm clouds finally lift, there could be a wall of money waiting to be invested."
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