Aberdeen leans on Interactive Investor as assets under management plunge
Asset manager Aberdeen reported a drop in assets under management and advice in the first financial quarter, after the performance of Interactive Investor failed to combat outflows and market volatility.
Assets under management and advice (AUMA) slipped from £556bn to £547.7bn, amid weaker markets, the disposal of its financial planning business and net outflows of £2.9bn.
Adviser and investments
The adviser business reported flat year-on-year net outflows of £0.6bn while AUMA also dropped from £80.4bn to £78.6bn.
Gross inflows of £1.9bn were offset by an increase in equity redemptions, but momentum in its SIPP pension product, which attracted 3,000 new customers, and the arrival of new adviser chief executive Rich Denning in May, signals a push back to growth.
The FTSE 250 group’s investment arm saw AUM tumble 1.7 per cent to £383.4bn from £390.4bn, reflecting overall net outflows and volatile markets.
Institutional wealth and retail reported net outflows of £5.4bn, up from £4.1bn, offsetting inflows into fixed income and real assets of £0.3bn and £0.1bn respectively.
Insurance partners clawed back from net outflows of £2.3bn, but ultimately failed to attract inflows at £0.0bn.
Interactive Investor performance
Meanwhile, Interactive Investor continued on its growth trajectory, with a 14 per cent year-on-year jump in customers, reaching 513,000.
The business saw a record number of SIPP transfers, up 32 per cent year on year to 116,000.
Net inflows reached £3.0bn, the highest month of net inflows on record, up 88 per cent year on year, as the business benefitted from increased brand awareness and service repricing.
But AUA dropped from £97.5bn to £95.3bn, after net inflows were offset by disposal of the financial planning business, which had a £3.6bn impact, and wider volatility.
Outlook
The group remains committed to the outlook set out in its full year results despite first quarter volatility, expecting profits and net capital of at least £300m.
Aberdeen also plans to keep leaning on Interactive Investor to leverage tailwinds in the UK wealth market, and “take advantage of its improved cost structure” and “very strong capital position”.
Jason Windsor, group chief executive officer, also anticipates “stronger investment performance” in its investment arm, reflecting its “growing confidence in our pipeline”, while the hiring of Denning as adviser chief executive is expected to “reposition the business for a return to growth”.