Direct platform assets pass £600bn

Direct to consumer platform assets reached £606bn in the third quarter, passing the £600bn barrier for the first time, according to data from consultants Fundscape.

Growth of £16.1bn for the quarter was more modest than previous quarters, with net inflows of £8.3bn accounting for half of the growth.

Hargreaves Lansdown remains dominant in the sector, with 35% of assets (c.£209bn), but grew at a slower rate (1.5%) than rivals.

Top five direct platforms (assets) in Q326

Source: Fundscape, 9 November

Asset growth was highest for Interactive Investor, which reported a £4.1bn increase in assets (25%) for the quarter. This was followed by Hargreaves Lansdown and AJ Bell which both saw asset growth of £3bn for the quarter.

The summer dip in flows was marked this year. Gross flows fell 22% to £21.6bn and net flows by a much sharper 36% to £8.3bn, while the net-to-gross slipped eight percentage points to 39%.

Top five direct platforms by net sales Q326

Source: Fundscape, 9 November

Gemma Maher, head of market insights at Fundscape, said: "Investors had every reason to sit on their hands this summer. With a budget hanging over them and renewed hostilities in the Gulf, holding back was the sensible choice, and the drop in flows reflects that. Even so, assets passing £600bn shows how far this market has come.

"The budget settled one question but raised others. Keeping the £20,000 cash ISA allowance was the right call, and higher tax on savings interest from April 2027 could help the ISA case. But the Bank of England’s rate rise makes the case for investing harder, and we expect a modest fourth quarter. The real test is the 2027 ISA season, which will coincide with older savers gifting pensions before inheritance tax bites in April."