AJ Bell share price rises after boost in customers but Hargreaves Lansdown falls after slowing business growth
New customers flocked to retail investment firm AJ Bell over the year, but the firm reported that net inflows were down on last year due to a “challenging market backdrop”.
In a trading update covering the year to September, the firm reported it had seen net inflows of £4.2bn into its platform business, which includes its direct-to-consumer platform and its advised model. This was down from £5.8bn last year.
However, customer numbers increased by 50,880 to close at 476,532, up 12 per cent in the year. The inflows helped assets under administration grow 11 per cent to a record £70.9bn.
Its shares were up over four per cent.
AJ Bell’s investment management division performed stronger than last year, recording net inflows of £1.65bn, up 57 per cent on last year.
“Our investments business enjoyed another year of significant growth, fuelled by strong demand from advisers and customers for our straightforward and low-cost investment range,” Michael Summersgill, chief executive at AJ Bell said.
Analysts at Numis said AJ Bell was well positioned for the future despite the difficult market environment over the past year.
“Although current conditions are challenging across the savings sector, we believe platforms like AJ Bell will show structural growth in market with an increasing share of self-directed investments,” they said.
Fellow retail investment platform Hargreaves Lansdown also released a trading update today, covering the three months to September – the first quarter in its financial year.
The firm confirmed that Active Savings continues to perform well and has been the key driver of net flows as clients favour cash savings over “risk based investments”.
In its full year results released last month, Hargreaves Lansdown said its savings products had attracted record new business of £3.2bn in the year.
But despite the continuing strength of savings, net business slowed compared to the year before. The UK’s largest retail investment platform saw £600m of net new business in the quarter, down from £700m last year.
Shares in Hargreaves Lansdown were down over five per cent.
“We continue to see net client growth and positive net new business despite the macroeconomic backdrop and its on-going impact on investor confidence and client behaviour,” new chief executive Dan Olley said.
Analysts at Numis were again hopeful for the longer term prospects of Hargreaves Lansdown given the savings market continues to grow.