Insider - December 2022

The last 12 months has seen upheaval in Westminster, turmoil in the markets and the return of inflation. Against this backdrop it is incredible to see how robust our industry is. Advisers we speak to have continued to support their clients, continued to look at ways to grow their businesses and helped us as we continue to evolve our products and services.

I am, as ever, very grateful for the ongoing support of advisers up and down the country that continue to support us. We never take that for granted. I’d like to take this chance to thank you for sticking with us and providing the feedback that helps us go from strength to strength. I’ve no doubt that, with your continued support, we will continue to grow and deliver an ever-improving platform service and offering for you and your clients.

Highlights of the year

Financial results

Our latest financial results revealed some encouraging news on the back of a very challenging year. Across the business we welcomed 87,449 new customers to the fold and received net inflows of £6.4 billion. All of this helped our revenue climb 15% to £145.8 million, with profit before tax increasing 13% to £55.1 million.

I am sure you will agree, solid numbers in very challenging conditions.

Reduced charges

AJ Bell Investcentre was already one of the most competitively-priced platforms in the UK. Our profitability allows us to regularly look at ways to pass back benefits to the end investor in the way of reduced charges. Here’s a rundown of just a few recent key examples:

• Cash transfers-in to our SIPP are now free of charge. (The charge of £60 plus VAT still applies for in-specie transfers-in.)
• The SIPP setup charge no longer applies for any applications that are instructed online, regardless of the investment option. (Any paper-based applications still attract the setup charge of £120 plus VAT.)
• Any proportionate disinvestments on the Funds & Shares Service are now free of charge, reduced from £1 per investment included in the instruction.
• Our platform custody charge has been removed for any cash held in portfolios within the Funds & Shares Service.

AJ Bell Investments on the up

In a year where potential pitfalls have been thick on the ground, AJ Bell Investments’ strong focus on risk management seems to be paying off. In fact, all of our multi-asset funds outperformed the Investment Association sector average – not just over one year, but also over the three- and five-year periods to 30 September 2022.

Full details of all of our multi asset solutions are available here.

The strong performance has played through to a healthy increase in asset flows. Overall, Assets Under Management increased by 27% in FY22 to close at £2.8 billion (FY21: £2.2 billion), while underlying net inflows in the year were £1.05 billion (FY21: £922 million).

The value of investments and the income from them can go down as well as up and your client may not get back their original investment.

New ISA dashboard upgrades

Now that we offer flexible ISAs, we decided to make a few upgrades to the ISA dashboard in the V2.0 area of our website.

As well as giving an overview of all your clients’ ISAs, and how much they have subscribed in the current tax year, the dashboard now also shows any withdrawals they have made, and the total amount of subscription allowance remaining after taking those withdrawals into account.

It’s worth remembering that you can also download a client’s ISA subscription and allowance information into a CSV file, which could be helpful if you want to ensure they are making the most of their ISA subscription allowances in the run-up to tax year end.

Investival highlights

This year’s Investival lived up to its reputation, delivering another fantastic day of insight and entertainment to the 350 plus advisers who joined us at London’s Shaw Theatre.

If you weren’t able to attend the live event, the Investival follow-up webinar is now available for you to view on the Infocentre whenever you like. Featuring leading fund managers from across the UK, it reveals their strategies and insight on various investment sectors and asset classes, from Technology and Infrastructure, to Blockchain and much more.

Of course, Investival is just one of the many CPD-worthy seminars and workshops we organise each year. You can find details of our other upcoming events for 2023 here.

Charitable donations

As a company, we believe in doing our bit for the wider community – both by supporting our staff to do volunteering during work hours, and also raising money for good causes. The company itself donates large sums every year, and in 2022 AJ Bell gave a total of £70,000 to charity.

£10,000 of this money went to Smart Works, a charity that helps to coach women into employment and provide them with suitable clothes for interviews. Referrals to the charity are made from job centres, the prison service, women’s refuges, homeless shelters and various other places that aim to help vulnerable or disadvantaged women get ahead in life.

A further £60,000 went to an organisation called Stop.Breathe.Think. which provides a free and confidential mental health helpline for young people across the UK. This was the final donation we made from the Wage War on COVID fund that we set up during the pandemic.

AJ Bell Futures Foundation

As part of our aim to build more deep-rooted, long-term partnerships in our communities, we recently established a new charitable framework called the ‘AJ Bell Futures Foundation’.

The foundation will work with various charitable organisations to help people take control of their finances and, by extension, their future. We have committed to contribute 0.5% of our PBT each year to the foundation, and for 2023 we are delighted to have partnered with IntoUniversity and SmartWorks. I look forward to telling you exactly how the money has been put to use in future editions of Insider.

Platform awards

The Money Marketing Awards 2022 proved to be another good night for AJ Bell, with wins for Best Retirement Provider, Provider of the Year, and – for the third year in a row – Best Platform.

AJ Bell Asset Management recently picked up a prize too, having been named ‘Best Overall Medium Firm’ at the Citywire Investment Performance Awards.

We wouldn’t win these awards if it weren’t for the hard work of our staff and the support we get from advisers, so I’d like to say a sincere ‘thank you’ for endorsing our platform.

A look to the year ahead

Higher cash interest rates

From 1 January 2023 we will be increasing the interest payable on cash balances in the AJ Bell Investcentre SIPP, RIA and Funds & Shares Service cash accounts. From then, the following tiered rates will apply:

As rates are tiered, the actual rate each account receives may be blended, depending on the size of the balance. You can find full details of the current interest rates, and how they apply, in our rates document.

Touch by AJ Bell

Work on Touch by AJ Bell – our streamlined, app-based platform designed specifically for advisers and their clients – is progressing well. In fact, we expect to start final stage of beta testing activity early in the New Year. We will communicate more across 2023 as things evolve.

Investment Outlook 2023

How will the investment world look next year? So much depends on what happens with inflation, interest rates, Ukraine and Government policy, and none of us has a crystal ball. But we can offer you our Investment Outlook 2023 instead.

Full of expert opinion from a wealth of respected sources, the Investment Outlook provides a snapshot of the most probable economic, political, and market challenges facing you and your clients in 2023, as well as some potential areas of emerging opportunity. You can download your copy for free now.

‘10% drop rule’ to be scrapped

I think you’ll be delighted to hear that the Government will be scrapping the highly unpopular ‘10% drop rule' next year. Here at AJ Bell Investcentre we have been quite vocal in our criticism of this rule, which forces advisers to inform their clients whenever the value of their discretionary managed portfolios falls by 10% or more compared to its value in their last periodic statement.

The idea behind the rule was that it would get people who had lost touch with their investments to re-engage with them, but more often than not it just spooked people into making rash decisions. As well as making clients unnecessarily nervous, it piled another administration task on to their advisers, often at times when they would much rather have been focusing on more pressing decisions.

I’ll leave the final word on this to our Head of Marketing, Mark Rendle, who summed the news up perfectly:

‘“This is welcome news for advisers, their clients and the industry as a whole, and means 2023 will witness the removal of one of the least effective pieces of regulation on the books.”

Festive opening hours

Before I sign off for the year, it just remains to wish you all a very happy Christmas and a healthy and prosperous New Year, and to remind you of our opening hours for the festive period.

All the very best for 2023!