AJ Bell adds 35,000 new customers despite ‘challenging’ backdrop

AJ Bell pulls in another £2.8bn as investment platform adds 35,000 new customers despite ‘challenging’ market backdrop

  • AJ Bell reported net inflows of £2.8bn in the six months to March  
  • The investment platform added 35,000 new customers 
  • Revenue grew to £75.5m but revenue per AUM dipped 3.7 basis points

AJ Bell has continued to grow its customer base following the pandemic-induced boom in retail investing and pulled in £2.8billion in net inflows.

The company said its platform customer base rose to 404,383, with non-platform customers rising to 14,926 in the six months to 31 March. Total customers are up nine per cent to 418,309.

AJ Bell shares are up nearly two per cent to 260.2p in early trading.

AJ Bell boss Andy Bell welcomed the growth in customer numbers despite the ‘challenging’ environment

Chief executive Andy Bell said: ‘This is a very good result against a significantly more challenging market backdrop to that experienced in the first half of last year, when retail investor engagement and dealing activity was exceptionally high particularly in the direct-to-consumer market.’

It is in stark contrast to rival Hargreaves Lansdown, which earlier this month announced a slowdown in customer growth.

The Bristol-based company reported a 46 per cent drop in inflows in the third quarter. New sign-ups to the platform were also two-thirds lower between January and April than in the same period last year.

AJ Bell’s growth saw the investment platform, which has £74.1billion in assets under administration as of March, report net inflows of £2.8billion in the period.

This came despite a £700million increase in outflows to £2.7billion, which the company said was partly due to a bulk annuity purchase by an adviser firm which resulted in a one-off outflow of £200million.

AJ Bell’s pre-tax profit plummeted 17 per cent in the six-month period, down from £31.6million to £26.1million. 

Revenue for the period inched higher, from £73.9million to £75.5million, but revenue per assets under management dropped 3.7 basis points to 20.3 basis points.

Bell said this was because of ‘the impact of normalised customer dealing activity and lower interest rates compared to the same period last year’.

He added: ‘However, our diversified revenue model positions us well across all market conditions and we are now seeing the positive impact of recent interest rate rises on our revenue margins.’

Bell also highlighted the rising cost of living as a possible short-term headwind for inflows, particularly in the retail market.

‘Our diversified revenue model provides inflation protection, ensuring we are well-equipped to succeed in different macro-economic conditions. A higher interest rate environment will provide a significant benefit, with higher revenue and profit margins expected both in the second half of the financial year and FY23.’

The company is looking to broaden its reach with the launch of its new investment platform Dodl.

The app goes head to head with commission-free apps like Freetrade with an annual charge of just 0.15 per cent. It offers a selection of 50 UK shares and 30 funds with some popular US shares joining soon.

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