Platforms report record-breaking 2021 as assets reach £933bn
Platform assets rose by 19% to £933bn in 2021, according to Fundscape, which said the market “broke every record going” last year as markets regained momentum.
Fundscape also revealed gross and net flows jumped to new highs of £164bn and £69bn — described as "eye-watering" increases of 29% and 92% respectively.
The consultancy said it had to wait to publish individual platform data until the last publicly-listed platform reported its results on 9 March but gave an overview of the market on Tuesday (8 February).
It said while stock markets had been strong the UK had also been "battered by some persistent economic headwinds such as fuel and labour shortages and rampant inflation". However, investors remained sanguine.
Analysis showed that, while the first half of the year is usually best due to ISA season, the platform industry recorded record gross flows in the final quarter of 2021 with gross flows of £46bn and net flows of £24bn.
Fundscape chief executive Bella Caridade-Ferreira said: "Against all odds, the platform industry was home to its best annual sales in 2021. Despite the pandemic, 2020 turned out to be a good year for retail wealth management. However, 2021 was a fantastic one, despite rampant inflation and the uncertain economic and political outlooks weighing on investor sentiment.
"Those factors could take their toll in 2022, but with inflation and interest rates starting to climb aggressively and retail banks showing no sign of passing on interest rate rises to savers, we expect investors to double-down on their investing efforts.
"The ISA season will set the tone for the rest of the year. While it's unlikely to match 2021's sales figures, it's going to be a robust 2022."
Fundscape added the success of the platform market had resulted in unprecedented investment from private equity in recent years, which was fuelling increased merger and acquisition activity.
The comments follow news that the private equity firm that snapped up James Hay's parent company and bought Nucleus Financial in recent years is reported to be looking to sell at least a part of its stake in the platforms already. Reports suggested that a number of market sources understand Epiris, the private equity owner of the two adviser platform businesses, is looking to sell in 2022.
All the statistics are below:
A total of 19 platforms are included in the analysis. Platform coverage is estimated at 98% of the platform universe, the firm said.
