AJ Bell profits up as pension savers flock to platform

AJ Bell profits up as pension savers flock to platform

Self-invested personal pension (Sipp) and platform provider AJ Bell has reported a boost to its profits and client base, as more people move their assets from old life products onto the platform.

The number of clients investing through the firm went up 17 per cent from 140,450 last year to 164,500 in 2017, its annual results for the year ending 30 September 2017 showed.

This saw assets under administration increase 25 per cent in the year, from £31.8bn to £39.8bn .

The firm’s pre tax profits were also up 29 per cent, from £16.8m to £21.7m, on revenues of £75.6m, which were up 17 per cent.

AJ Bell said the increase in assets was driven primarily by new business, which amounted to £6.4bn in the year, representing, an increase of 78 per cent on the previous year's figure of £3.6bn.

The government’s pension freedom reforms, which came into effect in April 2015, saw many people move away from old life products to investment platforms to access products such as income drawdown or cash withdrawals.

They also boosted demand for Sipps, which AJ Bell said it had benefited from.

Unlike some of its rivals, the firm is not involved in any replatforming exercises, which further added to its stable financial position, its chief executive Andy Bell said.

He said: “Huge parts of the platform market are bogged down in expensive replatforming projects which will continue to hamper them in 2018.  

“We are well past that and our pace of organic growth means we have no need for acquisitions to increase our scale.”

He said moving forward the platform would continue to invest in developing its offering to advisers, including its in-house multi-asset funds, which launched earlier this year.

“We aim for our platform to be the easiest to use and the best value in the market, underpinned by quality service and support,” he said.

Meanwhile, the firm said it would continue its dividend policy with a 10 per cent increase to 28.25p a share, equating to a total shareholder pay-out of £11.6m.  

The firm has no debt, net assets of £61.4m and 472 per cent coverage over its minimum required regulatory capital as set by the European Capital Requirements Directive (CRD) IV.