Adviser purchases of investment companies close to £1bn in record year

Purchases of investment companies by advisers and wealth managers on adviser platforms in 2017 reached a record £990m, according to latest research published from the AIC using Matrix Financial Clarity.

This was 46% up on £679 in 2016 and 41% up on the previous high of £704m in 2015.

Total purchases of all products on platforms showed year-on-year growth, but to a smaller extent. They amounted to £124.9bn in 2017, which was 18% higher than in 2016 (£105.5bn).

In Q4 investment company purchases totalled £239m, the same as in Q3 (£239m) and 16% higher than in Q4 2016 (£206m). Purchases of investment companies in the first two quarters of 2017 were slightly higher, £254m in Q1 2017 and £258m in Q2 2017, reflecting the broad trend in platform purchases of all products.

The most popular investment company sectors over the whole of 2017 were global (17% of purchases), property direct – UK (11%), UK equity income (10%), debt (7%), infrastructure (6%) and property specialist (6%).

AIC chief executive Ian Sayers said: “Advisers are recommending investment companies due to their strong long-term performance and dividend record, innovation through new asset classes and the durability of the investment company structure.

“It’s significant that four out of the six most popular sectors for advisers are in alternative assets generating attractive yields, and two of these sectors are property. Since the problems experienced by most open-ended property funds after the Referendum, property investment companies have grown in popularity. Advisers are clearly recognising the suitability of the closed-ended investment company structure for illiquid assets.”

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