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AJ Bell's revenues and profits surge on rush of new investors

AJ Bell has revealed profits and revenues grew significantly last year thanks to its DIY investing platform attracting a record amount of new customers.

A rush of new investors and existing customers ploughing more cash into shares and funds meant revenues at the Greater Manchester-based business jumped 15 per cent to £145.8million in the 12 months to 30 September.

Pre-tax profits rose 13 per cent to £55.1million as it added another 87,000 customers.

Boom times: AJ Bell attracted a record number of new customers last year. Interest in investing platforms has surged since the pandemic, especially among younger investors 

The company said revenue was boosted by its platform business driving record net inflows of £6.4billion, which took its total assets under administration to more than £70billion for the first time.

It also attributed the rise to the very high trading in funds and shares during the UK's national lockdown over the winter period, and the recovery in global asset prices to either above or close to their pre-pandemic highs.

Trading has returned to more regular levels as the UK economy has reopened and restrictions have loosened, but the firm said that any increase in interest rates from their current record lows are likely to lift revenues further.

It expects demand for trading platforms to continue rising as 'an increasing number of people seek the security and peace of mind that a trusted investment platform can give them.'

AJ Bell is creating two new platforms to try and capitalise on this trend; an adviser platform called Touch, and Dodl, a commission-free trading app targeted at younger investors that was announced earlier this week. 

Chief executive and founder Andy Bell said: 'We continue to see significant long-term opportunities in the investment platform market. The pandemic has highlighted the need for people to take more control over their financial future, with increasing numbers of people investing for the first time.

'We believe there is increasing demand for simplified, app-based investment propositions in both the D2C and advised markets, so we are investing in two which we will soon bring to market.' 

Happy days: AJ Bell said it expects demand for trading platforms to continue rising as 'an increasing number of people seek the security and peace of mind that a trusted investment platform can give them.' 

The coronavirus pandemic has led to a surge in users of retail trading apps, especially among younger people who have come to investing for the first time and those with more spare cash on their hands. 

Hargreaves Lansdown, Interactive Investor and Freetrade are just a few of the investment platforms to have reported major growth in the volume of customers using their service since March 2020.  

There could be a further surge in new investors should the Omicron variant cause considerably more market volatility and impact on the world economy.

AJ Bell also announced today that Deloitte partner Peter Birch would take over as chief financial officer from July next year, replacing Michael Summersgill, who has become the deputy chief executive of the business.

Birch remarked that he had 'followed the progress of AJ Bell for many years' and has 'always been impressed by its strong culture and customer focus, which has enabled it to grow into one of the UK's leading investment platforms'.

He added: 'It is an exciting time to join the business, and I look forward to helping the company to deliver on its long-term growth strategy.'

Shares in AJ Bell ended trading 8.6 per cent lower at 361.2p on Thursday.