Inflows boost AJ Bell Investments as group AUA dips

‘Net flows and new customer wins have slowed year-on-year as expected’ say Jefferies analysts

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Shares in FTSE 250 investment platform AJ Bell slid 8% this morning following the release of what can best be described as a ‘mixed bag’ first quarter trading update.

Group assets under administration (AUA) closed the three-month period ending 31 December 2022 at £71.5bn, down 5.6% from £75.6bn recorded a year ago.

Assets under management (AUM), however, stood at £3.4bn on 31 December 2022, up from the £2.1bn recorded on the same date in 2021.

The brightest note in the results was AJ Bell Investments, which recorded a 62% annual increase in AUM to £3.4bn, an uptick of 21% from the end of the previous quarter. Much of this rise was fuelled by net inflows soaring to £443m, an increase of 143% on the same period last year.

Meanwhile, AJ Bell’s advised and D2C platforms saw total AUA hit £66.3bn, a 3% drop from last year. Compared with the previous quarter, AUA was up by 3%, as inflows and a solid investment performance reversed three consecutive quarters of decline.

CEO Michael Summersgill was pleased with what he called a “solid start” to the firm’s financial year, highlighting that the platforms continued to attract new customers and assets across both the advised and D2C markets.

During the quarter, more than 8,700 clients came aboard across both platforms, bringing the advised total to nearly 149,000, and the number of clients on the D2C offering to just under 286,000.

Summersgill added: “Whilst high inflation has inevitably squeezed household finances, we delivered £800m of net inflows to the platform during the quarter. This performance demonstrates the value of our dual-channel business model which enables us to capture customer and asset growth from across the whole platform market.

“We have a long track record of delivering organic growth and market share gains in both the advised and direct-to-consumer markets. Over 50,000 new customers have been attracted to our platform over the past year and we are continuing to invest in the development of our customer proposition to make investing as easy as possible, whilst delivering great value for money.”

The equity research team at Jefferies said AUA on both platforms closed in line with its forecasts, but noted that the gains were weighted more to market movements than to inflows, contrary to what the team had expected.

The equity team added: “Net flows and new customer wins have slowed year-on-year as expected. Market movements added 2% in the quarter. Advised AUA is marginally below consensus and D2C is in line, with the investment business ahead of expectations. Overall, we would not expect a strong market reaction.”

AJ Bell’s share price was still 8% below its open at 1pm, suggesting that investors did not look favourably on the Q1 trading update. At £3.40 per share, the price is down 5% since the start of 2023, but just under 2% below the nearly £3.47 it traded on at this time last year.

See Also: Net inflows onto AJ Bell’s platform plunge 17%

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