Wealth management firm lifted its dividend, with shares rising 1.8 per cent in morning trading
Wealth management business Quilter reported record net inflows and announced an increased dividend as client demand for professional financial guidance remains strong, reports BritPanorama.
Assets under management and administration (AUMA) rose 18 per cent to £141.2 billion from £119.4 billion in the previous year. This surge was driven by an impressive 83 per cent jump in net inflows, which reached £8.7 billion, coupled with favourable market performance.
Turnover increased by five per cent, although higher management fee income was slightly offset by reduced investment returns on shareholder capital. Pre-tax profit rose to £207 million, compared to £196 million the previous year, as reported by City AM.
The board announced a £100 million share buyback plan for completion throughout the year and proposed a final dividend of 4.3 pence, bringing the total for the year to 6.3 pence per share.
Furthermore, Quilter confirmed that the cost of compensating clients who had paid for financial advice but did not receive it would be £20 million lower than initially expected, having set aside £76 million due to regulatory scrutiny.
In early morning trading, shares climbed by 1.8 per cent to reach 190.2 pence.
Rae Maile, analyst at Panmure Liberum, noted that the potential for future growth remains intact, emphasising the irreplaceable nature of personal advice amid increasing automation in finance.
Maile remarked, “AI cannot augment but not, we are confident, replace personal advice because there are simply too many questions most clients do not know that they do not know.” He underscored that Quilter has multiple avenues for success in wealth management.
The Affluent and High Net Worth divisions of Quilter outperformed market competitors in net inflows throughout the year. The Affluent division experienced a 22 per cent rise in AUMA to £107.6 billion, with net inflows rising to £2.8 billion from £2.3 billion.
Meanwhile, the Independent Financial Adviser (IFA) channel reported net inflows of £5.8 billion, up from £3 billion, reflecting an increased market share and the acquisition of assets from rival platforms. The High Net Worth division marked net inflows of £0.7 billion, with CEO Steven Levin indicating an opportunity for enhanced performance and broader customer appeal.
Levin noted that the firm is strategically positioned to benefit from shifts in the wealth management sector and to foster overall growth. Recent transformations in UK personal tax legislation heightened the demand for personalised financial advice, prompting a surge in adviser activity as clients reassess their financial strategies.
He also observed a cultural shift from a nation of savers to one of investors, positioning Quilter advantageously to meet this evolving demand.
The firm is seeking approval from the Financial Conduct Authority for its ‘Targeted Support’ framework, which would allow it to offer bespoke recommendations without complete regulatory advice.
Levin expressed, “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.”
Looking ahead, the company forecasts high single-digit to double-digit profit growth for the coming year, anticipating increased costs associated with growth initiatives and the rollout of the ‘Targeted Support’ scheme.
Maile commented on the outlook, stating, “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.”
The reported performance by Quilter signals a robust demand for wealth management services amid a shifting financial landscape. The firm appears favourably positioned to navigate future challenges while sustaining growth, reflecting a wider trend in the industry towards personalized financial solutions.
