While gross flows were stable at £32.7bn lower disposable incomes resulted in substantial outflows as investors pulled money out.

Total platform assets saw a 0.2% rise to £906bn over the quarter reflecting improvements in stock markets.

While the figures were poor, overall the experience was not universal across the market as a small cohort of platforms saw solid net sales.

The five platforms with the highest net sales for the quarter reported higher net inflows than the combined platform market as a whole, demonstrating how high negative flows were for many platforms in Q3.

Numbers were just as poor for adviser-only platforms. Gross flows totalled £16bn, with net flows plunging to an all-time low of £1.3bn.

Top of the Fundscape adviser platform charts were Quilter, True Potential, Aviva and Transact.

Bella Caridade-Ferreira, CEO of Fundscape, said: “Although inflation is easing, it will not result in an immediate return to good times. The Israel-Hamas war is another major blow for global peace and economics, so the final quarter of 2023 could be even worse than the third.

 “The world is going through a painful economic adjustment that will last at least another year or two. Consumer finances and confidence will take time to rebuild. Platforms need to brace themselves for another disappointing ISA season and a difficult 2024, including two major elections on either side of the pond. It goes without saying that distressed companies and fire sales will present substantial M&A opportunities across the value chain.”

A separate report out today from consultancy The Lang Cat revealed that outflows from advised platforms in Q3 rose 12.37% on the previous quarter to £13.91bn.

Customers withdrew record sums from pensions (£7.58bn) and ISAs (£3.84bn).

The platform consultancy said that advised net sales dropped 37.44% to £1.72bn, a record low for the sector.

Quilter maintained a lead with £69.65bn assets under administration followed by Abrdn with £68.46bn.

Rich Mayor, senior analyst at The Lang Cat, said: “Money being withdrawn from advised platforms hitting new heights for the third consecutive quarter this year is why net sales and asset growth are minimal this quarter.

“Advisers are telling us there are two main drivers; clients are withdrawing more to cash in 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.”