AJ Bell ended last year with record levels of managed assets as the global economic backdrop improved in the latter months, boosting investor confidence.
The investment platform revealed assets under administration totalled £76.2 billion at its platform business on 31 December, a 15 per cent increase from the previous year and 7 per cent higher than in September.
Net inflows of £1.3billion in the three months to December, against £0.8billion over the same period in 2022, were complemented by positive market movements that added a further £4billion.
Running ahead: AJ Bell revealed assets under administration totalled £76.2 billion at its platform business on 31 December, a 15 per cent increase from the previous year
At the same time, the division’s customer numbers rose by 8,000 to about 484,000, with approximately two-thirds of these consumers belonging to its direct-to-consumer space.
Michael Summersgill, chief executive at AJ Bell, credited the platform segment’s growth to ‘increased confidence among retail investors’.
Many retail shareholders continued to take money out of the stock market last year as higher interest rates reduced the financial attractiveness of stocks relative to other investments like cash.
Cost-of-living pressures also left many Britons with less spare income to set aside for investment purposes, forcing many to pull out money to meet emergency short-term needs.
But as the year progressed, investors became more optimistic as tumbling energy prices, combined with the Bank of England’s successive interest rate hikes, started to dampen inflation.
Summersgill said: ‘Some of the macroeconomic headwinds experienced throughout 2023 showed signs of improving in the quarter, driving global equity markets higher and easing some of the pressure on household finances.’
Retail investment platforms saw trade boom during the Covid-19 lockdowns, when many Britons were investing part of their excess savings.
A large share of them were not traditional retail investors, who tend to be wealthier and close to retirement, but young people trying retail investing for the first time.
Even as inflationary pressures have intensified, Summersgill said AJ Bell’s dual-channel model has ‘proven its resilience…delivering consistent customer growth and net inflows’.
He added: ‘Whilst this strong start to the year provides good momentum as we head into the busy tax year-end period, we remain focused on the long-term growth opportunity that exists in the platform market and the investments that we are making.’
AJ Bell further revealed that its investment arm achieved a very positive first quarter, with assets under administration jumping 53 per cent year-on-year to £5.2billion.
AJ Bell shares were 6 per cent higher at £3.15 on late Thursday afternoon, making them one of the FTSE 250 Index’s top risers.
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