Platforms' AUA exceed £500bn after bumper Q1 - the lang cat

Advised assets under management in the platform sector surpassed £500bn for the first time during Q1 this year, ending at £514bn - an increase of 30% on the same period in 2020, figures from the lang cat reveal.

The consultancy said the platform sector had not seen flows this high since the defined benefit (DB) and pension freedom boom in 2018.

Figures were up 4% on Q4 last year, it added. But it also said a large increase compared to Q1 2020 is perhaps "unsurprising" given the market dip at the start of the coronavirus pandemic and the subsequent rally over the course of the year.

Total advised gross flows for Q1 were up 28% and 18% on Q4 2020 and Q1 2020 to reach £21.2bn, the lang cat said.

It added this was the first time since Q3 2018 that any platform has reported advised gross flows of over £2bn during a single quarter and "in Q1 of this year there were four platforms which hit this milestone".  This last happened in 2017, according to the firm.

According to the firm, advised net flows rose 32% and 34% to finish the quarter at £9.4bn. "Again we would need to go back to Q2 2018 to find the last time advised net flows were over £9bn (£9.5bn) which goes to show just how positive Q1 has been," the analysis said.

Mark Polson (pictured), principal at the lang cat, said: "It wasn't so long ago we were writing about advised AUA breaking the £400bn barrier and now, having pushed through the £500bn mark, there are no signs of things slowing.

"Of course, AUA is always helped by positive markets and this quarter was no different with the FTSE 100, FTSE all share and S&P 500 all up by around 4% to 5%. 

"The increases seen over Q1 puts advised gross flows back up to where they were in Q1/Q2 2018 towards the end of the pension freedoms and DB transfer boom. It remains to be seen whether this momentum will continue or if the bumper tax year end was a result of investors holding back until the country starts to open up following a year of lockdowns."

He added: "The sector will certainly be hoping that the good times are here to stay and while Q2 might not hit the same heights, there were signs of an acceleration even pre-Covid, so we're feeling bullish about the year ahead as we move past the pandemic."

The top five providers for AUA, gross flow and net flow for Q1 2021 were as follows: