Profits for Abrdn’s advice arm rose 75% year-on-year in the first half of 2022 despite significant losses in the parent business.
Adjusted operating profit rose to £7m, with £6m generated by its latest acquisition Interactive Investor, according to half year results released this morning.
Abrdn completed the acquisition of Interactive Investor for £1.49bn in May.
After a restructuring, Abrdn’s ‘Personal Vector’ arm now includes Financial Planning, digital retirement advice, discretionary wealth and ISA and digital investing.
The firm said fee-based revenue rose 41% to £58m for the half. Net flows were £0.3bn, including June’s £0.2bn of inflows from Interactive Investor.
Total discretionary client numbers remained constant at around 16,000.
Personal Wealth, Abrdn’s Financial Planning operations within the Personal Vector, saw underlying performance remain stable with £1m of adjusted operating profit.
Assets under management for the Planning business fell in the six months to 30 June 7.6% to £13.3bn. Net flows were £0.1bn (H1 2021: £0.5bn) due to broader market uncertainty.
Abrdn recently appointed a new head for its advice arm with existing CEO Caroline Connellan stepping down after less than a year in the role.
Half year results for the parent company were less positive, with Abrdn stating that they were “shaped by markets impacting profitability”.
Total net outflows were £35.9bn (H1 2021: £5.6bn), including a final Lloyds Banking Group tranche withdrawal of £24.4bn.
The Abrdn group reported an 8% drop in fee-based revenue at £696m, and a 28% drop in operating profit to £115m, both driven by market movements.
It reported an IFRS loss before tax of £320m, in comparison to a profit of £113m in the first half of 2021. Abrdn said this was largely due to losses of £313m from the change in value of several significant listed investments during the period.
Abrdn’s assets under management and advice ended the half at £508bn, a drop of almost 7% from the end of 2021.
Mr Bird said: “The half year group results largely reflect the challenging global economic environment and market turbulence. When I became CEO in late 2020 I said that we would pursue a strategy of diversification by refocusing our investments business into areas of strength, where we have scale and that lean into global growth trends and also significantly expand our reach into the higher growth UK wealth market.
“We are doing exactly that and the addition of Interactive Investor transforms our UK retail presence and future revenue streams. The strength of our balance sheet means that we can continue to invest and reward shareholders.”
Abrdn’s platform business saw fee-based revenues rise 6% in the first half of 2022. Adjusted operating profit for the division rose 3%.
Net flows fell to £1.4bn (H1 2021: £2bn), reflecting current customer activity in the current environment.
