Quilter sees net inflows rise as more clients look to access financial advice
Wealth management firm Quilter reported record net inflows and lifted its dividend, amid clients increasingly seeking financial advice.
Assets under management and administration (AUMA) jumped 18 per cent to £141.2bn from £119.4bn the prior year.
The hike was driven by an 83 per cent rise in net inflows to £8.7bn, coupled with a positive contribution from the markets.
Revenue inched up five per cent, after higher management fee revenue was partially offset by lower investment revenue generated on shareholder funds.
Profit before tax hit £207m from £196m the previous year.
The Board announced a £100m share buyback programme to be completed over the remainder of the year, and proposed a final dividend of 4.3 pence, bringing the final total for the year to 6.3 pence per share.
The group also confirmed that its bill to refund clients who paid for financial advice but didn’t receive it, is set to come in at £20m less than previously expected, after previously setting aside £76m following probing from the City watchdog.
Shares rose 1.8 per cent in early morning trading to 190.2 pence.
Rae Maile, analyst at Panmure Liberum, said: “The potential for future growth is unchanged given the usual certainties of death and taxes.
“AI cannot augment but not, we are confident, replace personal advice because there are simply too many questions most of which most clients do not know that they do not know.
“We have long stressed that there will be many ways to win in Wealth and Quilter has a variety of options.”
Affluent and High Net Worth performance
The group said its Affluent and High Net Worth segments outperformed their market peers for levels of inflows over the course of the year.
The Affluent arm recorded a 22 per cent rise in AUMA to £107.6bn, with its Quilter channel seeing net inflows swell to £2.8bn from £2.3bn.
Its Independent Financial Adviser (IFA) channel reported net inflow of £5.8bn, up from £3bn, reflecting an increased market share of new business coupled with winning assets from competitor platforms.
Meanwhile, the High Net Worth arm saw net inflows of £0.7bn, but Steven Levin, chief executive officer of Quilter, said that it can “improve performance” and attract a broader customer base.
Looking ahead
Levin noted that the “business is well placed to be a winner” from the changes that are reshaping the face of the wealth management industry, and boost overall growth.
The upheaval of UK personal tax legislation, including both the thresholds that apply for higher earners on pension contributions and introduction of inheritance tax on pensions from April 2027, has “increased the need for personalised financial advice”.
The shakeup led to increased adviser engagement, as customers sought to revise their existing financial plans, with the group also expecting a significant increase in intergenerational wealth transfer over the next few decades, upping demand.
Levin also acknowledged the shift in moving from being a nation of savers to a nation of investors, with the business “well-positioned” to meet this need.
The group is also in the process of obtaining permission from the Financial Conduct Authority to implement its ‘Targeted Support’ framework, which will allow it to offer tailored suggestions without requiring full, regulated advice.
He said: “Our goal is for the Quilter brand to be recognised across UK retail financial services as a customer champion and a trusted destination for pensions, investment services and advice.”
The group expects high single digit to double digit growth to profit over the next year, as it expects higher costs off the back of accessing growth opportunities in the market and accessing the ‘Targeted Support’ scheme.
Maile said: “We do expect net flows to continue to be delivered, and for profit growth to continue, but with the company rightly seeking to invest in future growth that profit growth will, initially, be below market expectations.”