Good afternoon, TCWU massive. It’s Rich Mayor here on the Update this week while Mark is not on it. I’m early training it to That London this morning after a dismal showing at the Home of Football, Fratton Park. But what better way to unfurrow my eyebrows than to think about the advised platform market instead.  

As you’ll have gathered from one of Mark’s recent Updates, we’ve crunched the numbers for Q2 and there is some quite interesting stuff in there. First up is the trend for the year so far in discrete quarters, which reads: no asset growth despite strong sales and declining outflows in the first quarter, followed by a swift market recovery in Q2, with continued good sales and steady, reduced outflows. Which is exactly the same trend from 2025. Spare a thought for those writing reports on trends at this level.  

A worrying trend in recent years is how much the Budget has interfered far too much with people’s financial plans. It’s not necessarily the actual policy so much as the sheer volume and variation of leaks and rumours in the past couple of years, but the net effect for the market has been a continuous rise in outflows as investors get understandably spooked into making often irrevocable decisions about their retirement.  

Well we shall lay our tribute to the Budget Gods in the usual fashion and pray for a quiet one. If not only because when very similar things happen in the market year on year everyone… just   sort of… tunes out.  

What? Oh yeah, so the interesting and relatively new thing in the numbers is the product split. So back in the super quiet Budget where not really much happened except… Bam! Platforms need to think of a different strategy to grow AUM now instead of just merely hoovering up pensions and waiting for markets and ad valorem charging to do their thing.  

The Pensions and IHT changes coming in next year are already reshaping the flows onto platforms. When we asked firms how they were looking to mitigate the changes for their clients, it was three things in particular (and many more in the ‘other’ box) that surfaced: increase gifting from pensions, increase the use of Bonds, and increase the use of trusts.  

We’re seeing that increasingly reflected in the shape of the business that firms are placing on platforms. The pension wrapper – the backbone of platform growth over the past decade and more – has this quarter fallen to its lowest net to gross ratio (aka the ‘stickiness rating’ internally, which always sounds at least a bit gross), since the spike of the budget. The trend is clear since the Budget announcing the changes though, and more money is coming out of pensions.  

There’s also a suggestion that the ‘oh don’t worry about those pesky pension changes, sling it in our Bond instead’ messaging from some platforms is starting to be reflected in the numbers too, it’s routinely the second-best contributor to net sales after pensions. We’ve been nosing around more with advisers to see what this business looks like and what it means for the future of the advised platform market.  

So first up, and for my money the biggest factor in future flows on the platform market, 64% of the panel report increased trust-based onshore bond use since the October 2024 Budget, 66% for offshore. Not one respondent reported a decrease of either.  

While bond providers will be rather pleased with that, it also means that every firm is writing business that, unless something exceptional happens, is staying there for a long time. This has some pretty profound differences to the way the platform market has been built so far, in transfers, in competition, in suitability, in features, in price, in service and I’m sure you can add plenty more right here if you’d like.  

But in a world of escalating outflows and competition from off-platform products and a fundamental change to the way you’ve modelled your proposition to serve your target market, Bonds offer platforms a level of security. Retention is baked into the wrapper, so long as a client isn’t wanting a chargeable event, and withdrawals are super controlled. That’s rather appealing in an environment where net sales are increasingly hard to gather up. 

Our recent research also shows that the main thing holding back further bond business being written is not really about confidence, or marketing materials for clients, but about simpler administration and removing platform bond charges.  

Your music choice this week is the amazing Willy Mason, with Gotta Keep Walking. Which is the first track on a beautiful album if you’re so inclined. 

Anyway, that’s enough from me.  

Bye-bye 

Rich