Interactive Investor strength drives Aberdeen's Q1 performance

(Sharecast News) - Aberdeen Group reported assets under management and administration (AUMA) of £500.1bn at the end of the first quarter on Wednesday, with continued strength in its Interactive Investor platform offset by net outflows in its Investments and Adviser businesses. The newly-revowelled FTSE 250 firm, better known as Abrdn in recent years, said Interactive Investor delivered £1.6bn in net inflows during the quarter, supported by strong customer growth, with total accounts rising 9% year-on-year to 450,000 and SIPP accounts up 29% to 88,000.

Daily average retail trading volumes rose by 19% compared to the first quarter of 2024, and customer cash balances increased by 10% to £6.8bn.

In April, the platform announced the acquisition of Jarvis Management's direct-to-consumer book, expected to complete in the third quarter and add up to £1bn in assets and 20,000 to 30,000 customers.

The Adviser division reported £73.7bn in AUMA, down from £75.2bn at the end of 2024, mainly reflecting market declines.

Net outflows of £600m marked an improvement on previous quarters and were the lowest since the third quarter of 2023, aided by restored service levels and platform enhancements.

The group noted an improving new business pipeline and reaffirmed its target to return the Adviser platform to net inflows by 2026.

Aberdeen's Investments division ended the quarter with £359.6bn in AUM, down from £369.7bn, as £6.4bn of net outflows and weaker markets weighed on the business.

The majority of the outflows came from a previously-flagged £4.2bn redemption of a low-margin mandate.

Despite equity outflows of £3.3bn, the quarter saw a significant £1.5bn net inflow into fixed income, driven by a mandate win from a European pension client.

Gross inflows in institutional and retail wealth reached £8.9bn, the highest in over two years.

The group reiterated its commitment to its 2026 financial year targets, including adjusted operating profit above £300m, net capital generation of around £300m, and annualised cost savings of at least £150m by year-end.

It also highlighted progress across its digital and advisory platforms and noted a £6bn quantitative strategies mandate funded in April, supporting its profitability ambitions in the Investments division.

"Our strategy is to become the UK's leading wealth business and to reposition our Investments business to areas of strength and market growth," said chief executive officer Jason Windsor.

"So far this year, we have made good progress against these objectives, despite the current heightened levels of market uncertainty.

"Interactive Investor has seen significant growth in new customers, and in trading volumes, which have risen to record levels during the recent period of market volatility."

Windsor noted that in Adviser, net outflows improved in the first quarter, adding that while there was still work to be done, the firm was encouraged by the business's progress - most notably in meeting or exceeding client service targets.

"In Investments, first quarter flows were impacted by the large redemption we noted at our full year results.

"We saw good inflows in fixed income in the quarter, but outflows in equities remained elevated. A major quant win in April has taken I&RW net flows to positive in the year to date.

"With clear strategic priorities and an ongoing focus on efficiency, we continue to target a material uplift in profitability."

At 1050 BST, shares in Aberdeen Group were up 1.71% at 148.7p.

Reporting by Josh White for Sharecast.com.