Abrdn: Share price doesn’t reflect adviser business

Abrdn: Share price doesn’t reflect adviser business
Noel Butwell, chief executive of Abrdn’s platform and advice businesses

Abrdn’s platform boss has said the company’s struggling share price does not currently reflect the true value of its adviser business.

The asset manager’s share price has fallen 42 per cent this year, relegating it from the FTSE 100 last month with reports suggesting it could pay out up to £500mn to shareholders.

Noel Butwell, chief executive of Abrdn’s platform and adviser business, told FTAdviser there was a “huge amount of untapped value” in Abrdn which he and the business wants to unlock.

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Currently, the group’s market cap is £3.26bn, around half of which is made up of Interactive Investor, the direct-to-consumer investment platform it bought for £1.5bn last year.

Abrdn’s adviser business is made up of two platforms, which hold some £68bn of assets.

Separately, Abrdn has an in-house financial planning business, Abrdn Financial Planning Limited, which holds £5.5bn in assets. This business sits within its personal business, run by Richard Wilson.

Based on Abrdn’s sale of Parmenion, valuations have made up around 1.275 per cent of assets. By the same maths, Abrdn’s platforms would be worth £867mn. 

In its results last year, the group valued the financial planning business at an additional £110mn. This takes the total value of Abrdn’s adviser business to £977mn.

But Abrdn uses a different valuation itself which sees its adviser business valued at closer to £1.7bn.

“Stephen Bird [Abrdn’s chief executive] has always said the asset manager’s adviser arm is the biggest hidden gem in the business,” Butwell explained.

“My job is to make it less hidden. You don’t get the value of this business in the share price at the moment.”

Abrdn plans to “retire” the ‘Wrap’ and ‘Elevate’ names as it prepares to move the platforms to a single technology on FNZ.

The provider, which claims some 2,500 advice firm users around 50 per cent market usage, wants to serve IFAs on a more “modular” basis, according to Butwell.

“Ultimately we want a core underlying platform with different offerings,” he explained.

Wrap offers a wider array of discretionary investment services and a broader range of investment solutions than Elevate.

“We still want to reflect different segments [of the IFA market],” said Butwell.

The platform provider is on track to launch a new portal on Wrap before the year is out, which intends to revamp the way advisers complete client reports and navigate tax wrappers.

“Our initial focus is on Wrap, however Elevate advisers will also benefit from these developments as we bring our platform solutions onto a single, yet more flexible, technology instance,” Butwell explained.

“As we go through the programme we will provide more details on that journey and how we will deliver these enhancements.”