Openwork reported record profits of £22.6m in the 2018 financial ahead of its hiccup with Neil Woodford on its mandate.
For the year ended 31 December 2018, assets on the platform increased 11% to £6.9bn and have continued to grow into this year with assets hitting £8bn in July. The rise in profits has allowed the business to pay its first ever dividend to shareholders, totalling £2m.
Openwork also reported the number of advisers across the network also grew by 262 to a total of 3,865. It is increasing its investment in adviser recruitment with the Openwork Academy welcoming 54 trainees to the scheme in 2019 so far this year, almost equalling the total intake for 2018.
Chief executive Mark Duckworth said: “2018 was a significant year in the development of Openwork as we became an independent business in April.
“It is therefore very pleasing to be able to report strong results whilst also investing in the future. We are growing the scale of our advice business across our diversified offering and this has meant we have been able to help more clients than ever.”
Woodford hiccup
The bumper results represent the period before Openwork was caught out by the fallout from the Woodford fund suspension due to their segregated mandate with the manager.
In June, it was left looking on the backfoot when its investment business, Omnis Investments, dumped Neil Woodford as manager on its £330m Income & Growth fund in the aftermath of the fund manager’s public fall from grace.
The mandate has now been handed to Jupiter’s Ben Whitmore.
Nextwealth managing director Heather Hopkins said Openwork’s mandate with Woodford had controls in place so that it wasn’t so heavily invested in unlisted securities. “I think it actually showed where a seg mandate can work really well.”
“Woodford was one fund out of many that Openworks have and their results have been really strong for a long time. I think their story is more about how it’s a vertically integrated business, there’s a really healthy demand for financial advice, so that’s how the business grows.
“It’s is invested in the firm’s own products so that continues to grow as well.”
Hopkins said Openwork has used its buying power to help bring down the cost of investment management and share those benefits with the customers.
“The thing I hope to see more of is evidence of that as their results continue to get stronger that the cost comes down for the customer,” she added. “I think the next stage for Openwork is to be able to produce that pricing power.”
