Advised outflows hit £14bn record high

Advised platforms suffered £13.91bn of outflows in the three months to the end of September, an increase of 12.37% compared to the previous quarter, in what is a record high, the lang cat has reported.

Total outflows from advised platforms to date in 2023 now amount to £38.1bn, compared to £29.2bn in the same period in 2022, an increase of 30%.

The lang cat has also reported that net sales have also hit a record low of £1.7bn, having fallen further from Q2.

Senior analyst at the lang cat, Rich Mayor, said: “Money being withdrawn from advised platforms hitting new heights for the third consecutive quarter this year is why net sales and asset growth are minimal this quarter.

“Advisers are telling us there are two main drivers; clients are withdrawing more to cash savings and also to cope with the cost of living. The responses from advisers are consistent with the conversations we’re having with platforms too.

“Retirement plans and sums needed are likely to have increased due to inflation, cash interest rates are the highest they’ve been for years, as are annuity rates. All of this combines to create a perfect storm for advised platforms.”

The specialist financial service consultancy said the combination of record high outflows and record low net sales means that there was next to no asset growth for advised platforms.

Assets also increased by 0.06% compared to Q2, now standing at £545.96bn.

Mayor added: “The question now is ‘are we at the peak of this activity?’ and we think yes, just about.

“The fourth quarter is likely to be similar to this one, but with interest rates steady, cash and annuities rates have likely hit a high point. It’s likely that 2024 will be the start of things turning back to something like normal for platforms. But the journey will be slow and recovery fragile.”

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