The advised platform market's total assets under administration fell by 12% in the first quarter of 2020 despite market volatility, which the lang cat said demonstrates the resilience of financial advisers and the platforms themselves.
The 12% drop in advised platform AUA has sunk the market total to £394bn - the first time it has dropped below the £400bn mark since Q4 2018. Over the same period, however, the FTSE 100 lost 25%.
Gross flows across for D2C and advised platforms combined were 40% higher in the first quarter of 2020 compared to 2019 year-on-year. Net flows for D2C and adviser platforms combined rose by 28% over Q1.
The lang cat principal Mark Polson (pictured) said the relatively strong performance of platforms compared to stock market falls was driven by three factors.
"Firstly, ‘accidental' persistency has increased as transfers, retirements and life goals are put temporarily on hold," he said. "Second, some investors will also be using platform cash as a haven from market volatility and new business flow is of course a lagging indicator - what happens now takes 8-12 weeks to make its way into the figures
"Lastly, diversified portfolios are doing exactly what they are meant to do. We know that markets go up and down, and we've seen strong progress since late Q1 in that regard. But whatever markets do, platforms are in a good place to demonstrate their resilience over the next two quarters, with both gross and net flows strong in Q1."
Continuity beyond 2021
PFS's Keith Richards judging chair
‘What are the Chances’
RO6, AF1 and AF5 exams moved online
Follows 'comprehensive review'
It’s The Pro Adviser Podcast
Report from the Asian Development Bank