AJ Bell has posted a 21% jump in revenue for the six months to the end of March and increased its technology spend after its platform experienced outages in November on a sudden spike in trading.
The platform provider’s interim results revealed £73.9m in revenue during the period, up from £60.9m the year before. Its profit before tax jumped by 39% to £31.6m, from £22.7m in 2020.
Total assets under administration closed the period at £65.2bn after inflows of £3.1bn and “favourable market movements” of £5.6bn. AUA was £56.5bn at the end of March 2020.
Increase in younger and less experienced investors
The firm’s advised business saw customer numbers climb to 118,509, up 9% from the end of March 2020. It saw net inflows of £1.7bn, taking AUA to £41.1bn.
Direct-to-consumer (D2C) customer numbers increased by 41,584 during the period to 213,767, up from 172,183 at the end of March 2020. The average age of new D2C customers was 38 in the period, five years younger than the average of the wider customer base, AJ Bell said.
The D2C business saw net inflows of £1.6bn, taking AUA to £16.9bn.
“We continue to see an increase in applications from younger and less experienced investors, as a growing number of people look to take control of their financial future and seek to generate better returns in a low-interest-rate environment,” said AJ Bell chief executive Andy Bell (pictured) in the CEO report accompanying the results.
The firm’s discretionary arm, AJ Bell Investments, saw assets under management increase by 75% to £1.4bn in the first half of the year.
“This growth was driven by increased demand for our simple, transparent, low-cost investment solutions from both advisers and D2C customers, as we maintain a strong three-year track record of performance across our range of active and passive portfolios,” said Bell.
It comes after the platform provider last month posted its Q1 results which revealed a record increase in platform users driven by a boom in non-advised customers, up 48% over the past year. This followed an RNS update in March in which it predicted it would smash its revenue forecast for the year by at least £6m, bringing in £136m.
Tech spend jumps 17% as Andy Bell addresses trading issues
Writing in the results, Bell also addressed service issues with trading on the platform in November last year as the Covid vaccine announcement and the outcome of the US election caused a sudden spike in trading activity.
Along with Hargreaves Lansdown and Fidelity Personal Investing, AJ Bell suffered outages across its platform on 9 November after a barrage of trading activity led to millions missing out on one of the biggest market rallies.
The following month, the firm vowed to invest in technology to address the issue and the latest results showed spending on tech increased to £11.5m in the six months to the end of March, up from £9.8m the previous year – a 17% jump.
See also: AJ Bell vows to invest in tech after November meltdown
“We subsequently carried out an extensive and detailed root-cause analysis and have taken a number of actions which have prevented any recurrence,” Bell said. “Additionally, we have also accelerated work on our operational resilience strategy to further enhance the resilience of our platform.”
The firm also announced on Thursday it would be renaming Adalpha, its recently acquired digital platform for advisers, as Touch by AJ Bell.
“The recent acquisition of Adalpha will accelerate the development of a new mobile-focused platform to enhance our advised proposition and enable advisers to service a wider range of clients,” said Bell.
