The PMS report from the lang cat consultancy in Scotland reveals that pension gross inflows to platforms are 16% down on Q4 2017 compared to an overall drop of 5% in total sales across all investment wrappers.
The lang cat says it believes that the combination of professional indemnity issues for advisers, a lack of clear direction from the regulator, platforms taking stock about how “compliantly” they can compete for business and transfer multiples dropping have all contributed to a slowdown in sales levels.
In asset terms, the platform market continues to be buoyant despite regulatory and market volatility challenges, says the lang cat.
Total platform assets under management increased 7.1% year on year (Q1 2018 VS q1 2017) to £494 billion with a healthy 12% growth in the advised segment to £371 billion over the same period, says the firm.
Elsewhere, the PMS also highlights the changing face of platform selection with PROD (Product Intervention and Product Governance Sourcebook) now having an impact.
Terry Huddart, market analysis manager at the lang cat, said: “Despite well documented re-platforming issues, new business market share has not changed significantly in the quarter even in the face of recurring issues caused for advisory businesses and consequent strain on client relationships.
“This is partly to do with how difficult it is to move existing clients to a different platform. However, PROD is the new kid on the block that brings both challenges and opportunities for advisers and providers alike. There is now more onus on advisers to evidence platform selection by client segment and PROD is rules rather than guidance.”
“We believe there is opportunity to use the legislation to help build a more defined client solutions and for providers to make it really clear who their propositions are designed for. It is usually much more realistic for firms to appoint a strategic platform panel than assess each client on price against each platform. Although most do operate in that way, many advisers will still find client justification onerous. PROD therefore has the potential to help underpin strategic panel selection.
“We don’t think it’s impossible to still have a single platform for all clients, but it is becoming more difficult”.