AJ Bell  

AJ Bell to launch DFM models in second half of 2020

AJ Bell to launch DFM models in second half of 2020

AJ Bell is set to launch its third party discretionary fund management models on the adviser platform in the second half of this year.

In its half yearly results, published today (May 21), the platform confirmed it planned to open up its advised platform to a “select group” of third party DFMs.

Through the service, AJ Bell will provide the tax wrapper, custody, dealing and settlement service while the adviser appoints a selected third party DFM to manage the funds.

The timeline has been announced as AJ Bell reported its total customer numbers had increased by a record 30,000 in the six months to March, tallying 262,000 as at March 31. Advised client numbers jumped 6 per cent to 104,000.

It also reported a 22 per cent increase in revenue, up to £61m, while its profit before tax jumped 28 per cent to £22.7m when compared with the same time period in the previous year.

Total net inflows reached £2.1bn for the six month period — up £1.8bn year-on-year — and this was primarily driven by platform net inflows of £2.5bn. Defined benefit transfer inflows accounted for £400m of inflows, down from £500m last year.

Adverse market conditions saw AJ Bell’s assets under administration drop 8 per cent to £48.3bn, but the company has maintained its interim dividend at 1.50p per share.

AJ Bell also reported its Retirement Investment Account, which it launched in January as a “simple pension proposition” with a “competitive, all-in fee of 25bps”, had already gained traction with advisers.

On its direct to consumer platform, the firm said it had seen increased demand for investment guidance and the use of its three online investment solutions — the AJ Bell funds, ready-made portfolios and favourite funds.

Chief executive Andy Bell said: “It is difficult to predict the full and long-term impact of the Covid-19 pandemic, and how it will influence market volatility, investor sentiment and policy decision-making, with the Bank of England having already reduced interest rates twice in March.  

“Although such factors will clearly have an impact, we have operated successfully in periods of high market volatility and low interest rates before. We have been profitable during such periods in the past, and our balanced revenue model has proved very resilient.”

Commenting on regulatory developments around drawdown pathways, Mr Bell said he hoped the fact the City watchdog’s investment pathways had been pushed back would “give the FCA time to reflect on what we strongly believe is a well-intentioned but flawed regulatory initiative”.

imogen.tew@ft.com

What do you think about the issues raised by this story? Email us on fa.letters@ft.com to let us know.