Market Summary - Q4 2018

£206bn AUA

Total market assets have grown 0.5% over the year from £204.6bn as at the end of Q4 2017 to £205.8bn at the end of Q4 2018. Q1 to Q3 saw strong growth in the market before an 8.1% fall in AUA during Q4 18. This comes in a year where we saw a 12.5% decline in the FTSE 100, and a 8.7% decline in global stocks according to the MSCI World Index.

Customer accounts continue to rise

There are just under 4.9 million customer accounts at the end of Q4 2018, an increase of 20% over the year. In numbers, this is over 807,000 new accounts over the year.  A significant proportion of these new accounts came from groups such as Aegon and True Potential Investor moving workplace pension customers onto their D2C books. Excluding these workplace customers, the more traditional DIY investor base also grew by 20% over the year.

Robo-adviser growth

Robo-adviser assets have grown by over 73% over the 12 months to the end of Q4 2018. Total AUA is now circa £3.2bn, making up under 2% of the total market. Customer accounts have increased by over 160% this period if we exclude True Potential Investor’s workplace pension customers. If we look at market share by customer numbers, robos have a 1.6% market share.

Growth in simpler solutions

Across the market we continue to see growth in assets within ready-made portfolios and an increasing number of platforms’ own-brand funds now feature in their top fund lists. Between 4% - 12% of platform flows are typically directed to own brand funds and 45% - 55% of fund assets are typically directed to the preferred fund lists.

Asset managers

Development has been muted with Vanguard the most interesting one to watch. The imminent release of their SIPP should increase customer numbers, average account size and of course assets under administration. The Vanguard launch is a significant threat to those platforms for whom SIPP accounts have traditionally been quite sticky – Vanguard LifeStrategy funds typically feature in the top 10 funds on most platforms.

Life companies

There has been very little activity from life companies in terms of proprietary build and activity. Aviva is directing customers seeking simple solutions to Wealthify, of which it owns a majority stake. L&G is making more noise in the B2B partnership space and a clearer focus on auto enrolment.