AJ Bell has experienced its “most profitable” year to date after listing on the stock exchange in December last year.
In the company’s final results for the year ending September 30, published today (December 5), AJ Bell reported a profit before tax of £37.7m — jumping 33 per cent and up £9.3m on the year before.
According to the firm’s chief executive Andy Bell, the “excellent result” was primarily due to the success of AJ Bell’s platform and its ability to attract and retain customers.
AJ Bell’s overall assets under administration grew by 13 per cent over the year, breaking the £50bn milestone to £52.3bn, while customer numbers grew 17 per cent to 232,000.
The firm’s platform business had underlying net inflows of £3.2bn.
Mr Bell said: “The overall impact from market movements, return on investments and other movements was positive at £2.3bn despite the FTSE All Share index closing the year 2 per cent lower than 12 months earlier.”
Mr Bell said the firm was “delighted” with the level of engagement during the IPO process, adding both its institutional and retail offers were heavily over-subscribed.
Looking forward, he said the firm’s aim was to become the “easiest investment platform to use”.
According to Mr Bell the firm had invested in technology to enhance the user experience throughout the year for both advisers and direct consumers.
For example changes to the adviser platform mean IFAs are now able to deal with their clients’ Isa and GIA over a mobile application, invest in ‘pactive’ portfolios and provide their clients with ‘white labelled’ reports.
The results showed the company would also launch a retirement investment account early next year — a pension offering with one simple charge which tapers down from 0.25 per cent per year with no additional charges for administration, drawdown, custody or dealing.
AJ Bell stated its research showed a "straightforward, no-nonsense and transparent approach" to charging would prove particularly attractive for those with pension portfolios at the sub £200,000 level.
Today the firm also announced a share option plan that would see AJ Bell donate to charitable causes if the firm exceeds its growth plans.
The maximum award would be £10m if the firm increased its earnings per share by at least 100 per cent over three years and by 150 per cent over five years.
Mr Bell also tackled the so-called ‘advice gap’, arguing that “guidance solutions” were the best way for platforms to help non-advised customers invest in a responsible manner.
He added: “Best buy lists and other guidance tools have recently come under scrutiny for good reason.
“We have an absolute conviction that these guidance solutions, if constructed with integrity and transparency, are a force for good.”
He also thought there was a coherent argument that the Financial Conduct Authority should “loosen the reins” and allow guided solutions to be more easily matched with a consumer’s appetite for risk, without this inadvertently straying into a personal recommendation and regulated advice.