by Nick Britton
2017 set a number of records: the longest period in history of negative real interest rates, the world’s tallest ever sandcastle, and – most importantly – the highest level of investment company purchases on adviser platforms.
I can say this with confidence though we don’t have data for the fourth quarter of the year yet. In the first nine months of 2017, platform purchases reached £745 million, which was higher than the total for the whole of 2016 (£671m) and the whole of 2015 (£698m) – the latter was the previous record. The likelihood is that the 2017 total will be close to £1 billion.
We’re not getting big-headed about this: after all, the total value of purchases of all products on adviser platforms is well in excess of £100 billion a year, and investment companies make up less than 1%. But we are making big strides: when the AIC embarked on its campaign to prepare for RDR, the annual rate of purchases was barely a fifth of what it is now.
What has driven the change? RDR itself, fairly obviously. But also, because advisers and wealth managers see that we have something to offer: superior long-term performance, strong income advantages and the ability to invest in illiquid assets like property without the difficulties experienced by open-ended structures.
Purchases of investment companies on adviser platforms. 2017 data for first three quarters only. Source: Matrix Financial Clarity
So, what of 2018? Well, we’ve seen the introduction of the investment trust KID, ushering in a bold new era of clarity and transparency. Or perhaps, not entirely. I’ll let our chief executive, Ian Sayers, explain.
We’ve also updated our platform cost tables, produced in association with the lang cat, which allow you to compare the costs of holding investment companies on all the major adviser platforms. The updated research can be found here.
Finally, we are busy making the last preparations for our VCT seminar tour, which begins in Knutsford and Leicester next week. There is still time to book a place at these events, which should be a useful way to spend a couple of hours, particularly in the light of the rule changes to VCTs announced in Philip Hammond’s Autumn Budget.
I hope to see you soon in the New Year, and as ever, do get in touch if you have any questions or comments.
Nick Britton, Head of Training, AIC
The world's tallest sandcastle, according to the Guinness Book of Records, was completed last year on 1 September, which also happens to be Nick's birthday
Click on the links for more information and to book.
17 January 2018 AIC VCT Seminar (Knutsford, Cheshire) Lunchtime seminar hosted by Nick Britton (AIC) with guest speakers Alan Wallace (Octopus VCTs) and Tim Levett (Northern VCTs).
18 January 2018 AIC VCT Seminar (Leicester) Morning seminar hosted by Nick Britton (AIC) with guest speaker Alan Wallace (Octopus VCTs) and another speaker Mike Quinn (Foresight VCTs).
31 January 2018 AIC VCT Seminar (London) Morning seminar hosted by Nick Britton (AIC) with guest speakers Trevor Hope (Mobeus VCTs) and Patrick Reeve (Albion VCTs).