Platform assets look set to reach £1.4trn by 2022 through a combination of regulatory, political and economic factors, Fundscape has predicted in its quarterly platform report.
Fundscape chief executive Bella Caridade-Ferreira (pictured) said she expected the market to hit the £1.4tn figure in five years' time as platforms "evolve considerably as delivery and investment solutions become more tightly integrated".
Looking at 2017 alone, AJ Bell has so far seen the biggest proportional growth in assets - up by 25% (£6.3bn) this calendar year. This compares with 15.8% (£7bn) growth for Standard Life, 14% for Old Mutual (£6.2bn) and 17.3% (£12bn) for Hargreaves Lansdown's D2C-focused platform.
Aegon's ARC platform continued to top net sales in the third quarter, attracting £1.9bn of new assets, followed by Standard Life on £1.7bn.
The Aegon-owned Cofunds meanwhile has become the first platform to break through the £90bn mark, with Hargreaves Lansdown now standing on £82bn of assets under administration.
Fundscape also noted the three platforms with £75bn-plus of assets each - Cofunds, Hargreaves Lansdown and Fidelity - together accounted for almost half (45%) of the platform sector's total assets.
Pension sales on the up
Total gross and net sales in the sector in the third quarter of 2017 fell slightly to £30bn and £13bn respectively, but were still high by historical standards, according to Fundscape. It said the strength of investment activity in 2017 had been such that year‐to‐date gross and net sales of £93bn and £42bn are respectively 38% and 50% up on like‐for‐like sales in 2016.
Platforms with a strong pension heritage performed particularly well, it pointed out. "ISA activity was less pronounced in the third quarter but pensions picked up the slack, generating around 70% of platforms' net flows," said Caridade-Ferreira.
In 2017, pension business has accounted for some two-thirds (65%) of industry net sales. Caridade-Ferreira said this "pension factor" - people taking advantage of pension freedom, and a steady pipeline of defined benefit transfers - was expected to continue for a number of years.
She added: "Despite Brexit and the regulatory headwinds facing the industry in the next few years, the platform industry is the de facto conduit for pension and investment solutions. As a result, platform growth is likely to continue in the same vein in the medium term."
In an environment where yields are so low, costs can make a huge difference to the outcome’
ETF market to hit $7.6trn by 2020
Responsible for fund selection
Closing in 2020
Focused on asset liquidity and credit quality