Parmenion returns to profit after 3 years of losses under Abrdn

Parmenion returns to profit after 3 years of losses under Abrdn
Parmenion’s chief executive, Martin Jennings

Parmenion made a profit of £4.6mn last year following its sale by Abrdn to private equity backers.

Under Abrdn’s ownership, the advised platform suffered three years of losses between 2018 and 2020. The business last made a profit in the 15-month period ended December 2017, the year after Abrdn bought it.

Having made a loss of £4.8mn in 2020, the jump to a profit of £4.6mn marks a £9.4mn improvement. The firm put this down to “realising benefits from investments made in previous years”.

Parmenion’s chief executive, Martin Jennings, said in annual results published today (May 18) that 2021 was an “extraordinary year” for the company.

“Our change of ownership has sparked a change of pace and a company-wide focus on helping our customers thrive,” said Jennings.

“Last year saw the business move into solid profit against a backdrop of severe economic uncertainty. With increased new business inflows these results are an important reflection of the adviser support we have fostered.

“While 2022 will bring significant macroeconomic and geopolitical challenges, we believe we are in an excellent position to support advisers.”

The platform’s assets under management grew 17 per cent last year, from £8.2bn at the end of 2020 to £9.6bn. Meanwhile, management and custody fees grew from £29.6mn to £35.8mn – an increase of 21 per cent.

The company also provided a cash flow statement for the first time, which showed a total cash increase in the period of £7.9mn, compared to £2.2mn in 2020.

Staff costs fell from £16.3mn to £15.7mn during 2021, with staff numbers decreasing from 234 to 214. The business put this reduction in large part down to losing the Virgin Money contract, which would have seen it provide wealth management for the ASI-Virgin Money joint venture.

The loss of this contract, which was terminated by Standard Life Aberdeen, also meant non-core revenue was reduced by £9.8mn, and that net flows fell 24 per cent to £764.6mn. Overall, gross flows totalled £1.59bn for the year.

Aberdeen Asset Management bought Parmenion in 2016, a year before Aberdeen merged with Standard Life. Then in March 2021, Parmenion was sold by Abrdn to private equity firm Preservation Capital Partners and AssetCo in a £102mn deal. The former owns 70 per cent, whilst the latter owns the remaining 30 per cent.

Jennings has previously told FTAdviser Parmenion had “sat on the side” at Abrdn, but that under its new ownership it can roll out features more quickly.

“Since we’ve come outside of the Standard Life Group, we are unencumbered by somebody else's strategy. And that allows us now to focus on the things that our customers have been saying,” Jennings said in February.

Earlier this month, the platform said it was in the process of adding 22 portfolios from Tatton Investment Management and LGT to its platform.

The additions mark the first time two external partners have come onboard in the platform’s 15-year history.