AJ Bell shares surge on strong inflows and solid customer growth
Investing.com – Shares in AJ Bell (LSE: AJB) rose 1% in trading today after the company reported strong Q1 results, particularly in its direct-to-consumer (D2C) business, underscoring the strength of its flexible investment model in a volatile market.
Net inflows and D2C growth beat expectations
AJ Bell recorded net inflows of £1.9bn in the quarter – up 19% year-on-year and 8% above Visible Alpha’s estimates. The D2C platform continued to be the main driver, with net inflows growing 40% YoY, beating market expectations by 22% – a result that was considered “impressive” given the cautious investor sentiment.
Assets under management and stable performance
The firm’s total assets under management (AUA) now stand at £90.4bn – up 13% year-on-year. Despite being slightly impacted by market volatility (-1.1%), the D2C platform’s organic growth rate was 17.3% year-on-year. Inflows increased 13% quarter-on-quarter, while outflows remained stable – a positive sign for sustainability.
Advice segment recovers from fiscal pressure
Although the advisory segment recorded a 17% decline in net inflows year-on-year, it recovered significantly with a 67% increase quarter-on-quarter, as budget concerns in late 2024 began to ease. The advisory segment’s managed portfolio (MPS) now stands at £3.8bn – up 19% YoY.
D2C-led customer growth
The platform’s total customer base reached 593,000, up 18% year-on-year and ahead of market expectations of 6%. D2C continued to be the main driver of user base expansion, reflecting the growing trend of individual investors managing their own assets.
Positive outlook for Q3
AJ Bell’s CEO said the D2C platform had a strong start to Q3, with high transaction volumes despite the uncertain macro-economic environment. In the first few weeks of the quarter, the company attracted over £300 million in net investment – a positive indicator for further growth.
Expert Review
“The CEO’s upbeat statement at the start of Q3 is a clear indication that AJB’s diversified and flexible business model is well-suited to the current market environment, which should reassure investors about the stock’s medium- to long-term prospects,” RBC analysts said.