Two of the largest online trading platforms in the United Kingdom reported robust customer and asset growth in defiance of volatile markets and sluggish investor sentiment.
AJ Bell’s Strong Customer and Asset Growth
For the twelve-month period ending in September, AJ Bell registered 476,532 new customers, an increase of more than 50,000. Approximately two-thirds of this expansion can be attributed to the company’s direct-to-consumer division.
The assets under administration of the platforms division of the Manchester-based conglomerate increased by 11% to a record £70.9 billion, owing to robust asset inflows and favourable market fluctuations of 4%.
Net inflows increased by approximately £600 million to £1.65 billion in the investments division, while managed assets rose by 68% to £4.7 billion.
The increase in assets was ascribed by AJ Bell’s chief executive, Michael Summersgill, to interest in the company’s “straightforward and low-cost investment range.”
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“The investment platform market continues to have robust long-term growth drivers,” he continued. “We eagerly await the release of the annual results for yet another prosperous year.”
As of Thursday morning, AJ Bell shares rose 3.5% to 263.2p, the highest increaser on the FTSE 250 Index.
Hargreaves Lansdown’s Customer Expansion Amid Trading Challenges
Additionally, customers and assets expanded for Hargreaves Lansdown, but momentum has slowed in light of the deteriorating trading environment.
In the three months ending in September, the group reported that 8,000 consumers joined the platform, compared to 17,000 during the same period last year.
Investment Trends and Client Preferences
According to the source, self-invested personal annuities and cash savings products, including money market funds and short-term bonds, were the most common investments of new clients.
In addition, share trading volumes on the Hargreaves platform decreased by 66,000 month-over-month to an average of 634,000, a decrease from the previous year.
Despite this, total revenue increased by 13% to £183.8 million, as a rise in net interest margin compensated for the adverse effects of a decline in share trading.
According to Dan Olley, the Chief Executive Officer of Hargreaves, the firm’s net client growth and positive net new business remain robust in spite of the persistent influence of the macroeconomic environment on investor confidence and client conduct.
As of 9:30 a.m. on Thursday, Hargreaves Lansdown shares were among the worst performers, falling 5.3% to £6.98.
The Impact of the Post-Lockdown Era on Online Trading
AJ Bell and Hargreaves both experienced significant success during the lockdown era when confined Britons invested a portion of their excess savings in the stock market.
Many of them were novice retail investors in their youth, as opposed to the more affluent and near-retirement-age clientele that these businesses typically serve.
As a result of the cessation of Covid-related restrictions and the increased cost of living, economic expansion has slowed as households burdened with skyrocketing food and energy costs are unable to set aside sufficient funds for investment.
