Platform groups AJ Bell and Transact have delivered positive flows and double digit revenue growth in the midst of the coronavirus sell-off though both have taken a hit to assets under management.
Despite fears the platform “bloodletting” would be many times worse in 2020 thanks to the arrival of the coronavirus, D2C firms and advised groups have so far proven resilient and unlike many asset managers have been able to buck the trend of net outflows.
AJ Bell reported in its interim results on Thursday it had attracted £2.5bn of net inflows to its platform over the six months to the end of March. Around £1.1bn of this was from new business on its advised platform, while its D2C business took in a further £1.0bb. Defined benefit inflows contributed a further £400m.
Advised platform Transact, owned by FTSE 250 Integrafin, achieved record inflows of £2.1bn over the same interim period, which was more than the £1.8bn it brought in H1 19.
Both groups delivered double digit revenue growth thanks to strong net inflows and higher client numbers. Integrafin saw revenue rise 13% to £53.8m, while AJ Bell’s sales were up 22% to £60.9m.
AJ Bell and Transact reveal Covid hit to AUM
But volatile markets following the Covid outbreak did result in a hit to both firm’s total assets.
Adverse market movements dragged AJ Bell’s assets under administration down 8% to £43.8bn.
Rival Hargreaves Lansdown revealed a similar sized hit to AUA from the coronavirus last week with assets shrinking from £105.2bn to £96.7bn though this was over the four months to the end of April.
Transact recorded a modest increase in funds under direction which closed the period at £35.0bn, up £600m on the previous year. But this was down £2.8bn from the £37.8bn it had at the end of the financial year in September.
Andy Bell cautious about Covid impact
Though AJ Bell founder Andy Bell (pictured) acknowledged the group’s strong performance “at a time when the country faces one of its most significant challenges in decades,” he warned the impact on markets, investor sentiment and economic policy from Covid-19 would be difficult to predict.
“However, we have operated profitably during periods of market volatility and low interest rates before and our business model has proved very resilient,” Bell said.
“The long-term growth drivers of the platform market remain in place and our strong capital position, coupled with a buoyant trading performance mean the outlook for the future of the business remains positive.”
AJ Bell stuck by its previously announced decision to maintain dividend payouts, with the board declaring an interim dividend of 1.50p per share.
By mid-morning its shares were up over 2% at £4.58.
