Research from the Association of Investment Companies (AIC) has revealed purchases of investment companies by financial advisers and wealth managers on adviser platforms reached a record level of £745m in the first nine months of 2017, already surpassing the total for the whole of 2016 (£671m) and 2015 (£698m), which was the previous record.
The AIC said in a statement that its data collated by Matrix Financial Clarity in Q3 2017 saw investment company purchases totalled £235m, up 35% on the same quarter of the previous year (£175m), taking the 2017 past its previous record. Quarterly purchases were, however, lower than those in Q1 2017 (£252m) or Q2 2017 (£257m), reflecting the trend in platform purchases of all products, which fell in Q3 relative to the previous two quarters.
The most popular sectors in Q3 2017 were Global (18%), UK Equity Income (10%), Property Direct – UK (10%) and Property Specialist (8%). It’s interesting that two of the four most popular sectors were property sectors. Fourth is the highest ranking for the Property Specialist sector since records began. The quarter saw the launch of three new companies in the sector (Residential Secure Income REIT, Triple Point Social Housing REIT and Warehouse REIT) as well as fundraisings from Empiric Student Property and GCP Student Living.
Ian Sayers, chief executive of the Association of Investment Companies (AIC) said: “It’s fantastic that 2017 is already a record year for adviser investment company purchases, even without counting purchases in the fourth quarter. Advisers are clearly recognising the benefits of investment companies including their strong long-term performance, income advantages and suitability for illiquid assets.
“The latest quarterly data also shows the continuing popularity of property investment companies since the Brexit vote, and the problems experienced by open-ended property funds. There was significant fundraising in the quarter, and for the first time, property sectors made up two of the four most popular sectors for advisers and wealth managers.”
The main adviser platforms for investment company purchases during Q3 2017 were Transact with 41% of the market, followed by Alliance Trust Savings and Ascentric with 18% each. FundsNetwork took a 6% share, Raymond James 5% and 7IM 4%, the AIC said.