UK Financial Adviser Highlights: 2022 Q4 Report

Financial adviser platform sales activity stabilised in Q4 after declining over the past two quarters. Gross sales came in at over £21 billion, while net sales were £1 billion. Not all was positive, however, as ISAs and SIPPs remained in outflows for the second straight quarter.

Continuing on the trend that really started to show in Q2, the Unclassified sector remained hot and was once again the best-selling sector. Much of the activity in this sector is being propelled by the use of model portfolio services by financial advisers as well as the use of distributor specific multi-asset funds.

Inflation also seemed to finally catch investors’ attention, with the Global Inflation Linked Bond sector capturing the second highest volume of net flows. This sector has traditionally been niche so it will be interesting to watch how long it stays front of mind.

From a platform perspective, it paid to be #1. Platforms that ranked #1 in terms of AUM with a respective financial adviser firm, accounted for all £1 billion of net flows. Platforms ranked #2 and lower posted outflows collectively.

Looking ahead to 2023, the question for financial advisers and fund managers may not be where money flows, but how much of it flows. High interest rates, high inflation and dim near-term economic growth prospects for the UK, may mean there is more pain ahead for UK retail. The one hope though is that money can be brought off the sidelines. Retail cash balances remain high, having increased by over £400 billion since the pandemic started in 2020. Putting this money to work for clients, is likely the best opportunity on tap for advisers.

Tune in next time then to see if January’s rising equity markets, helped pull investors back into the markets.

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