AJ Bell profit soars as it attracts new, younger customers
AJ Bell has benefited from the renewed interest in investment, boasting record levels of new customers and inflows in the first half of the year.
Revenue jumped 21 per cent to £73.9m in the six months to the end of March while profit before tax soared from £22.7m to £31.6m.
It came as AJ Bell attracted a record 51,492 customers in the period, up 32 per cent over the last 12 months.
The increase was largely driven by continued growth in its platform business, which saw net inflows of £3.3bn, up from £2.5bn in the second half of 2020.
Shares dipped 0.9 per cent this morning.
“The average age of our new direct-to-consumer customers was 38 in the first half of the year, five years younger than the average of the wider customer base. Average portfolio values remained high at £79,000,” chief executive Andy Bell.
“Our record number of new customers has been helped by the low interest rate environment, as savers seek higher returns on cash held in savings accounts and Cash ISAs.”
He told CityAM the firm was not going after the new wave of investors that have come out of the pandemic.
““We’re not out there picking up the kids buying crypto, the kids who were short squeezing on meme stocks. These people are coming to use with a decent chunk of money,” he said. “It’s not all about age, often it’s about coming in with the right approach. We want people coming in and putting long term investment strategies.”
There has been a resurgence in interest in investment from consumers in large part due to the pandemic, which gave younger investors the opportunity to save.
Total assets under management climbed a staggering 75 per cent in the first half of the year. AJ Bell said it has seen an increasing level of demand for ESG investment following the launch of its responsible growth fund last October.
“There’s almost been an awakening in everyone that we need to be financially responsible… there’s a whole group of people over the last year that have realised the government isnt going to look after them and they need to sort their finances out,” Bell told CityAM
AJ Bell rebrands Adalpha
In March AJ Bell bought startup Adalpha to enhance its mobile offering for advisers and their clients.
Today the listed company announced Adalpha will rebrand to Touch by AJ Bell to sit alongside AJ Bell Investcentre ahead of a soft launch before the end of the year.
The platform will only be available via UK authorised financial advisers and clients will not be able to open an account without an adviser. It will not incorporate any robo-advice functionality.
It is AJ Bell’s fourth acquisition in 26 years and further deals are unlikely to be on the horizon. “We’re not a natural acquirer of businesses… We won’t shut the door to them but it wouldn’t be our primary way of growing”.