Advised platforms experienced record outflows in the third quarter of 2023, with recovery in 2024 likely to be “slow and fragile”, according to the lang cat.
New data from the financial services consultancy showed advised platforms suffered £14 billion of outflows in the three months to September, up more than 12% on the previous quarter’s figures.
Total outflows for the year to date have reached £38.1 billion, a 30% jump on the £29.2 billion recorded in the same period of 2022 as people continue to struggle with the cost-of-living crisis.
The lang cat said net sales also dropped to a record low of £1.7 billion, having fallen further from the second quarter. The combination of record high outflows and record low net sales means there was next to no asset growth for advised platforms, with assets increasing by just 0.06% from the second quarter to £546 billion.
The findings showed Quilter fared best, with £69.7 billion assets under administration, closely followed by Abrdn with £68.5 billion.
Rich Mayor, senior analyst at the lang cat, said: “Money being withdrawn from advised platforms hitting new heights for the third consecutive quarter this year is why new sales and asset growth are minimal this quarter.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.
“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.”
However, Mayor said this was likely to be the peak, with the fourth quarter expected to be similar to the third quarter.
“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,” he added.
