Last year was tough for platforms and now it seems 2020 is set to be even tougher as Fundscape has published its latest report for 2019.
According to the consultancy firm, geopolitical uncertainty, Brexit and a defined benefit (DB) transfer pipeline that tricked to a halt made 2019 a tough year for the sector. Despite this, annual asset growth was at 19% or £112bn, four times higher than the £30bn achieved in 2018.
Fundscape said this upturn of assets was largely the result of increased asset values. Some platforms delivered above-average growth for the year, with True Potential showing a growth rate of 35%. Aviva followed in second with 28.4% and the Aegon Retirement Choices platform came in a close third at 28.2%.
At the bottom though was Aegon's Cofunds platform with only 7.4%. This result may not be surprising to some following a tough year before for the platform. Aegon completed the re-platforming of Cofunds users onto its new ARC-based platform in May 2018 and since then, Cofunds users have struggled with transactions and payments, while some advisers also reported delays with the platform's contact centre.
Royal London's Ascentric platform, which has also recently finished a re-platforming project and is currently up for sale, was the second worst for growth, reporting 8.9%, a little more than Cofunds.
In terms of sales, Fundscape said that while stock markets were strong in 2019, Brexit led to investors sitting on the fence until the outlook was clear. Net sales amounted to only £29.7bn for the whole year, which the consultancy said were the worst figures since 2013, adding that the only platform to show a year-on-year rise was Fidelity.
Meanwhile, Transact was the leading platform of the year with net flows of £3.6bn and Aviva following right behind at £3.5bn. However, Aegon was at the bottom of the list with only £1.7m for the year.
2020 worse than 2019
Fundscape CEO Bella Caridade-Ferreira (pictured) said: "2019 will pale into utter insignificance to the bloodletting we're going to experience in 2020.
"What we thought was the light at the end of the tunnel has morphed into a train roaring down the track towards us at terrifying speed." She said coronavirus will have a "deep and long impact" on the world and the global economy.
"There is no doubt that 2020 will be many times worse than 2019. Given the spread of the disease, it's unlikely that 2021 will be any better either."
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