UK onshore retail fund sales hit record highs in 2025 amid industry reshaping

Onshore retail fund gross sales in the UK reached an all-time high in 2025 even as net flows weakened, reflecting a rapid reshaping of the wealth management landscape driven by portfolio remodelling and a growing reliance on outsourced solutions.

According to the Pridham Report from ISS Market Intelligence, onshore gross sales climbed by more than £10 billion, or about 5% year on year, while onshore net sales fell by nearly £10 billion. The report says this divergence reflects structural shifts in the market, including greater use of model portfolios and multi‑asset solutions, a tilt towards passive investments and a movement to globally benchmarked allocations.

“Gross sales hit record levels in 2025, so it’s important to look beyond weak net flows,” Benjamin Reed‑Hurwitz, head of research development for EMEA and North America at ISS MI, said in the report. “The UK wealth industry is changing fast. As asset allocation shifts towards model portfolios and multi‑asset solutions, portfolios are becoming more global and more passive, while consolidation is concentrating decision‑making power.”

ISS MI noted that 21 asset managers managed to grow onshore net retail sales during the year, and more than 70% of reporting offshore managers recorded net sales growth. Offshore funds, which have continued to attract investors in the post‑Brexit environment, saw net sales rise by around £3 billion in the fourth quarter, the report found.

Platform flows show a rising allocation to UK onshore bonds, in line with a broader investor pivot towards defensive diversification. Industry data reported by Money Marketing indicates that bond fund inflows increased by 8% in the third quarter even as equity funds experienced net withdrawals of 9%, with passive strategies contributing to the decline in active equity flows despite remaining net positive overall. Only 41% of fund groups delivered year‑on‑year onshore net retail sales growth in that quarter, down from around two‑thirds previously, underscoring widespread investor caution amid global uncertainty.

Across 2025 as a whole, UK retail fund flows were broadly steady, with net outflows of roughly £2.3 billion, matching the prior year. Money market funds were the standout sellers, attracting a record £6.9 billion over the year as investors sought cash‑like, lower‑risk options. December helped stabilise sentiment, producing about £2.0 billion of inflows, while the first half of 2025 saw net purchases of £2.9 billion, led by mixed asset funds which drew sustained interest.

Competition for flows has intensified as portfolio decision‑making becomes more centralised within outsourced and platform solutions. Reed‑Hurwitz warned that asset managers now need a clearly defined value proposition and demonstrable portfolio role at a competitive price to secure placement within model and multi‑manager mandates.

At the fund‑group level, Royal London Asset Management led onshore net sales in the fourth quarter, driven by demand for short‑term fixed income and money market strategies. Artemis ranked second, benefiting from record bond sales, and M&G continued to record demand for equity offerings, notably its Asian fund. Among passive specialists, HSBC Asset Management outperformed peers supported by multi‑asset and offshore fixed income demand, while Vanguard, Aviva Investors and Orbis showed mixed flows across asset classes.

Taken together, the data portray a market in transition: gross distribution activity has expanded even as end‑year net outcomes were muted, with investors prioritising defence and diversification and outsourced managers exerting growing influence on which funds gain traction.