AJ Bell hits half a million customer milestone

AJ Bell has increased its assets under management (AUM) to £5.8 billion, up 49% over the last year and 12% in the quarter.

The Manchester-headquartered financial services business updated the stock market this morning that it had also surpassed half a million platform customers in the period. 

When the business listed in 2018 it had just under 200,000 platform customers.

Chief executive Michael Summersgill commented: “We remain committed to providing low-cost, easy-to-use products that can be trusted by customers and advisers, and our continued investment into our customer propositions puts us in an excellent position to deliver further strong organic growth in the future.

“We saw strong momentum in the run up to the tax year end as improving retail investor sentiment, together with continued investment in our brand and propositions, helped to deliver £1.4 billion of gross inflows in March alone, a new monthly record for the business. Over the course of the quarter our platform achieved significantly higher net inflows compared to the prior year, up 33% to £1.6 billion.

“AJ Bell Investments continues to prove popular, particularly with financial advisers, which is driving strong flows via both AJ Bell Investcentre and third-party adviser platforms. Total AUM was up 12% in the quarter and 49% in the last year to £5.8 billion, reflecting the continued excellent growth of this part of the business.

“AJ Bell has always had a strong focus on offering exceptional value to customers and our philosophy of sharing the benefits of scale with our customers as we grow remains key to our strategy. On 1 April we reduced our custody fees for advised customers and halved our headline dealing fee for D2C customers to £5. We also increased the interest rates payable on cash balances held across all our products, further strengthening our overall customer value proposition.

“We are excited about the forthcoming launch of our ready-made pension service, which will help customers to easily consolidate their existing pensions with AJ Bell and invest them automatically via our low-cost, in-house investment solutions. Looking further ahead, the growth opportunity for the platform market remains significant and our ongoing brand investment will continue to drive increased awareness of AJ Bell, supporting our long-term growth ambitions.”

Investment bank, Panmure Gordon, retained its Buy call on AJ Bell’s shares after today’s announcement.

Analysts Rae Maile and Ross Luckman said: “The company has seen strong inflows in the period with growing momentum into the tax year-end, over 40% of the quarter’s gross flows being recorded in March.

“Net inflows of £1.6bn in the quarter were comfortably ahead of our estimates reflecting continued growth in customer numbers on both the Advised and D2C platforms as well as increased savings by existing customers.

“The company continues also to address its value proposition for customers (the impact of which we believe is already in guidance), reinforcing its competitive positioning and underpinning expectations for continued future growth.

“The UK wealth industry offers a secular growth story, platforms should offer faster growth than the market, and AJ Bell is growing its share of the platform market. While others have been seeing slowing inflows, and in some cases outflows, from cyclical factors, AJ Bell has delivered strongly and comfortably ahead of our expectations. The valuation does not reflect the growth being delivered making the shares particularly good value. It would be an excellent holding in a BRISA.

“The PER is just 15x for the current year and 14x for next, which is simply too cheap for the growth being delivered. Buy.”