The report said ISA flows totalled just £495m for the entire platform industry.

“The ISA season was dire,” according to The Platform Report from Fundscape.

All channels were affected with adviser net flows, for example, plunging to £4.6bn, a 50% drop against the first quarter of 2022, as consumers reacted badly to poor economic news.

Total gross sales in the period were £35.7bn and net sales just £9.5bn.

The report said: “The expectation of a recession and the cost-of-living crisis dragged on sentiment and flows. Two interest rate hikes didn’t help either.”

Higher interest rates are usually bad for stock markets but in the first quarter the FTSE 100 climbed 2%, the FTSE All World and S&P 500 rose 7%, and the tech-heavy Nasdaq was up 17%, the report pointed out.

The news boosted platform assets to £880bn, although the industry’s £930bn high is still some way off.

However, the sales numbers mask the fact that some platforms did much better than others, according to the report.

Aegon, for example, recorded gross flows of £10bn for the first time in nearly two years, while Quilter and 7IM’s flows rebounded to business levels last experienced in 2021.

In the adviser platform channel, vertically integrated platforms flourished in the challenging environment, with Quilter in pole position for gross sales for the sixth consecutive quarter, and True Potential for net sales for the fourth consecutive quarter (significantly aided by its adviser buyout programme).

Transact, though, was second for adviser gross and net flows, highlighting the importance and resilience of independent adviser platforms in the industry.       

Bella Caridade-Ferreira, chief executive of Fundscape said, “Net flows were low in Q1 because of poor sentiment and investors withdrawing cash to meet living costs and help their families. The good news is that from January’s low point, flows improved month on month and the trend continued in Q2.”

She said the rest of the year, “is likely to be better than we initially feared. What’s more, with the pension changes announced in the Budget we expect a long-term surge in pension flows and a corresponding rise in demand for advice. The future is looking rosier for the platform industry.”

A total of 19 platforms were included in the Fundscape analysis. Platform coverage is estimated at 98% of the platform universe.