Many adviser platforms suffered a noticeable downturn in new business in the second and third quarters of 2020. This was the inevitable knock-on effect of the downturn in advisers’ new business during the pandemic. Advisers have managed to keep hold of their existing clients – but Zoom is a challenging environment for winning new clients.
Flows picked up in the final quarter of 2020. This momentum looks to have continued strongly into the first quarter of 2021 – based on our conversations with platforms.
Total adviser platform assets ended 2020 at £594bn, of which about £481bn was pure advised assets, after stripping out non-advised, institutional and workplace business. Total assets grew by 8.7%, or £48bn over the course of 2020.
But of course, platforms aren’t the be-all and end-all of advisers’ client asset custody. Around 60% of advised flows were directed onto third-party platforms in 2020 with a further 10% going to in-house platforms.
A large proportion of advised assets are held directly with DFMs, life insurance companies and asset managers, and this isn’t all legacy business. Platforms have grown to deal particularly well with the majority – but not all – of advisers’ client needs. The really simple stuff and really complicated stuff is often being transacted off-platform, leaving platforms with around 70% of business in the middle ground.
We have just published our UK Adviser Platforms: Market Overview report, looking at the role platforms play in financial advisers’ businesses and addressing some of the key issues and trends facing the adviser platform market today. Get in touch for more details.