AJ Bell declared a record March quarter after pulling in 32,000 new customers and net inflows of £1.9 billion as retail investors moved to use their Isa allowances before the end of the tax year.
The investment platform also suggested that the volatility of the past few weeks had been spurring clients on to invest more rather than frightening them away, adding that three quarters of client trades since April 1 had been buys rather than sells.
Michael Summersgill, chief executive, said it was “a strong start to the financial year” with total assets under administration surging to a record £90.4 billion.
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AJ Bell, based in Manchester, operates a direct-to-consumer (DTC) platform for retail investors who make their own investment decisions in buying and selling shares and funds as well as a separate platform for the clients of financial advisers.
Customers of the DTC platform increased by a better-than-expected 23 per cent to 412,000 but advised customers were up by a lower-than-forecast 7 per cent to 177,000.
The March quarter is usually a busy one for investment platforms as clients time fresh investment to take advantage of the £20,000-per-year Isa allowance or lose it after April 5.
Gross inflows in the quarter were £4 billion, up 18 per cent, but after taking account of customers pulling money out, net inflows of £1.9 billion rose by 19 per cent compared with the March quarter last year.
Summersgill said the DTC performance was the strongest ever. AJ Bell battles it out for do-it-yourself investors with Abu Dhabi-owned Hargreaves Lansdown and Aberdeen’s Interactive Investor as well as other incumbent platforms.
He said the uncertainty over tariffs and the broader macroeconomic outlook this month had created significant market volatility and suggested that clients were taking the opportunity to buy on the dips. It had “led to increased DTC trading activity as customers use the flexibility of our platform to respond to changing market dynamics. The long-term investment outlook among customers is illustrated by the fact more than three quarters of these trades were buys with the net investment totalling more than £300 million.”
Vivek Raja, an analyst with Shore Capital, said it was “a resilient trading update” with a strong recovery in flows after the dampening effect of the October budget. “It feels like momentum is building,” he said.
Shares in the FTSE 250 company closed down 1½p, or 0.4 per cent, at 421¼p on Thursday. Founded in 1995, AJ Bell floated in 2018 at 160p per share.
Summersgill welcomed the government’s plan to boost retail investing by reforming the Isa rules and allowing more targeted support for non-advised investors. He has campaigned for a simplification of cash and shares Isas into a single product. Deposit takers are fighting suggestions that the cash Isa limit of £20,000 should be cut to help to nudge cash savers into stock market investment.
Interim results are due on May 23.
