Investment Case

We are one of the UK's largest investment platforms, with assets under administration of £50.7 billion.

Our business

  • Co-founded by Andy Bell in 1995, AJ Bell is one of the largest investment platforms in the UK
  • At the heart of our business is a clear and simple purpose: "We help people to invest"
  • We do this by making our platform easy to use and great value, with one of the lowest-cost pricing structures in the market
  • We operate at scale in both the advised and direct-to-consumer (D2C) segments of the investment platform market, through our flagship platform propositions: AJ Bell Investcentre and AJ Bell Youinvest
  • Our platform gives customers access to a wide range of AJ Bell and third-party investment options via Self-Invested Personal Pensions (SIPPs), Individual Savings Accounts (ISAs) and Dealing Accounts
  • AJ Bell listed on the London Stock Exchange’s Main Market in December 2018

Key investment highlights

We operate in an attractive retail market within the UK savings and investment industry

Structural factors supporting growth

Demographics – an ageing population that is both living and working for longer

Government and regulatory – drive for greater personal responsibility and self-provision of long-term savings, supported by pension freedoms and auto enrolment

Technology – digital age driving tech-savvy customers and asset flows from non-platform to platform

Financial – growing awareness of the UK savings gap and a shift from defined benefit to defined contribution pension schemes

High barriers to entry

Scale – required to achieve profitability

Technology – significant investment required to create scalable and robust systems with high levels of straight-through processing

Brand – recognition and trust required both in advised and D2C market segments

Regulatory capital and compliance requirements – increasing as platforms become mainstream

We operate an award-winning platform in both the advised and D2C market segments

  • One of the UK’s fastest growing adviser platforms
  • Used by UK FCA authorised advisers with either advisory or full discretionary permissions
  • Account types: SIPPs, Stocks and Shares ISAs, Lifetime ISAs, General Investment Accounts (GIAs), Junior SIPPs, Junior ISAs, Offshore Bond accounts and a full range of income drawdown options
  • Wide investment range: equities, funds, investment trusts, ETFs and bonds. Full SIPP capability including individual property
  • Investment solutions: low-cost Managed Portfolio Service and passive fund range
  • Highly competitive pricing
  • One of the UK’s fastest growing D2C investment platforms
  • Execution-only: 'investment guidance' provided but no 'personal recommendations' (i.e. no regulated investment advice)
  • Account types: SIPPs, Stocks and Shares ISAs, Lifetime ISAs, Dealing accounts, Junior SIPPs and Junior ISAs.
  • Mainstream retail investments: equities, funds, investment trusts, ETFs and bonds
  • Investment solutions: AJ Bell Passive funds, Favourite funds list and Ready-made portfolios
  • Investment help: Shares magazine articles, videos, daily market updates, weekly insight emails, podcasts and rich investment data
  • Highly competitive pricing

Our loyal, high quality customer base leads to greater average customer portfolio values in the both advised and D2C market segments.

Advised platform
£330k average portfolio value

Total Customers96k

AUA£32.8bn

1.17accounts per customer

Average customer age56

Customer retention rate95%

Average annual fees received per £100,000 invested£195

D2C platform
£90k average portfolio value

Total Customers115k

AUA£10.6bn

1.25accounts per customer

Average customer age45

Customer retention rate96%

Average annual fees received per £100,000 invested£330

Total customers and AUA correct as at 30 June 2019
Accounts by type and accounts by AUA correct as at 30 September 2018
All other data correct as at 31 March 2019

Profitable and scalable platform with embedded growth and margin expansion opportunities

Hybrid technology model

Proprietary user interfaces - adapatable and easy to use

Back-office systems outsourced to proven software providers - scalable systems updated for regulatory change

Back-office re-platforming completed in 2014 - system fully embedded in the business

Efficient operating model

High levels of online customer servicing, straight-through processing and automation

Single operating model supports both platform propositions - centralised operation in our Exchange Quay HQ in Manchester

Operational gearing driving increase in profit margins
Low operational impact of additional monies invested by existing customers
Decreased marginal cost of adding new customers and their assets to the platform

High quality, largely recurring revenue from a diversified mix of revenue types

  • Diversified revenue model - mix of fixed fees and recurring charges provides a balance of inflation protection and resilience in the face of economic and capital market fluctuations.
  • Increasing recurring revenues - yields predictable and sustainable revenue streams

Highly cash generative and capital light model supports a progressive dividend policy

Quick conversion of profits to cash

Cash generated from operations has averaged circa 100% of PBT over the past three financial years

Capital light and materially debt free business

Growth has been funded from retained earnings; it has not required primary fundraising or debt finance

Strong regulatory capital position

Our strong regulatory capital position is supported by a high Pillar I coverage in excess of approximately 440% (1)

Progressive dividend policy

The Board has adopted a dividend policy based on a 65% payout ratio

Any surplus capital accrued (over and above regulatory requirements or other specific needs) will be returned to shareholders at an appropriate time

(1) As at 30 September 2018.

An entrepreneurial, founder-led management team

  • Our CEO, Andy Bell, co-founded AJ Bell in 1995. We are now one of the largest investment platforms in the UK
  • Members of our senior management team have an average tenure of over 12 years
  • Our Board governance structure has been in place for over a decade

Highly engaged staff providing an award-winning service

  • We employ over 750 employees across two offices in Manchester and London
  • We have been recognised as one of the Sunday Times Best 100 Companies to Work For
  • Since 2016, we have won over 30 industry awards across both the advised and D2C market segments
  • All of our employees were awarded free shares as part of our IPO in December 2018
AJ Bell is 1 of 100 best companies to work for 2019
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