Direct to consumer platform sales continue to fall

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Gross and net flows for direct to consumer investment platforms continued their downward trend in 2023, hitting their lowest point in the fourth quarter of 2023, according to a new report.

Annual gross flows for the D2C platform market for 2023 were £40bn with annual net flows for the year at £10.7bn, a fall of 12.2% on 2022.

Net flows were only a third of the £27bn of net flows recorded in 2021.

Hargreaves Lansdown saw the highest gross sales for 2023 with £12.6bn while Interactive Investor topped net sales with £3.3bn.

Sales in D2C Platform Market: Gross Sales Q4 2023









Platform

Net sales Q4 2023

Interactive Investor

£3.3bn

Vanguard

£3.1bn

AJ Bell

£2.7bn

Hargreaves Lansdown

£1.2bn

Halifax Share Dealing/Lloyds

£0.3bn

Source: Fundscape

Despite economic headwinds, direct to consumer investment platforms reported a rise in assets to £320bn.

Hargreaves Lansdown topped the D2C platforms in terms of assets with £119.7bn of assets in its direct platform at the end of the fourth quarter. Interactive Investor was second largest with assets of £61.7bn.

Fundscape says that one platform bucking the trend was ETF-focused InvestEngine. It has trebled assets in a year and was fifth for net sales in the fourth quarter of 2023. InvestEngine’s recent launch of a Sipp will likely lead to a surge in sales, Fundscape predicted.

Bella Caridade-Ferreira, CEO at Fundscape, said: “Consumer sentiment is easily damaged and can take time to recover, but it is the principal driver of flows in the direct market. Everyone is looking for any signs of improved economic outlook and easing of inflation that will help that recovery, and hopefully a return to the higher levels of flows seen in previous years.

“The ISA season usually sets the tone for the rest of the year so a good ISA season will boost the industry no end, but a bad one could lead to further closures and/or fire sales. 2024 will be predicated on interest rates coming down and cash no longer being such stiff competition.”

Fundscape’s ‘The Direct Matters’ report covers the direct market on a quarterly basis.




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