Quilter Reports Record Inflows as Financial Advice Demand Surges
Wealth management firm Quilter has announced record net inflows and an increased dividend, driven by a significant rise in clients seeking financial advice. The company's assets under management and administration (AUMA) surged 18 percent to £141.2 billion, up from £119.4 billion the previous year.
This growth was fueled by an impressive 83 percent increase in net inflows, which reached £8.7 billion, alongside positive contributions from market performance. Revenue saw a modest five percent increase, as higher management fee revenue partially offset lower investment revenue from shareholder funds.
Profit before tax climbed to £207 million, compared to £196 million in the prior year. The Board has approved a £100 million share buyback program to be completed over the remainder of the year and proposed a final dividend of 4.3 pence, bringing the total annual dividend to 6.3 pence per share.
Client Refunds and Market Response
Quilter also confirmed that its bill for refunding clients who paid for financial advice but did not receive it is expected to be £20 million less than previously anticipated. The company had initially set aside £76 million following scrutiny from the City watchdog.
In early morning trading, shares rose 1.8 percent to 190.2 pence. Rae Maile, an analyst at Panmure Liberum, commented on the firm's prospects, stating, "The potential for future growth is unchanged given the usual certainties of death and taxes."
Maile added, "AI can augment but not, we are confident, replace personal advice because there are simply too many questions most of which most clients do not know that they do not know. We have long stressed that there will be many ways to win in Wealth and Quilter has a variety of options."
Affluent and High Net Worth Performance
The group reported that its Affluent and High Net Worth segments outperformed market peers in terms of inflows throughout the year. The Affluent arm recorded a 22 percent rise in AUMA to £107.6 billion, with its Quilter channel seeing net inflows increase to £2.8 billion from £2.3 billion.
Its Independent Financial Adviser (IFA) channel reported net inflows of £5.8 billion, up from £3 billion, reflecting increased market share of new business and assets won from competitor platforms. Meanwhile, the High Net Worth arm saw net inflows of £0.7 billion, but Steven Levin, chief executive officer of Quilter, noted that it can "improve performance" and attract a broader customer base.
Future Outlook and Industry Changes
Levin emphasized that the business is well-positioned to benefit from changes reshaping the wealth management industry. He highlighted that upheavals in UK personal tax legislation, including adjustments to pension contribution thresholds for higher earners and the introduction of inheritance tax on pensions from April 2027, have "increased the need for personalised financial advice."
These changes have led to increased adviser engagement as customers revise their financial plans. The group also anticipates a significant rise in intergenerational wealth transfer over the coming decades, further boosting demand.
Levin acknowledged the shift from a nation of savers to a nation of investors, stating that Quilter is "well-positioned" to meet this need. The company is currently seeking permission from the Financial Conduct Authority to implement its 'Targeted Support' framework, which will allow it to offer tailored suggestions without requiring full, regulated advice.
"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," Levin said.
The group expects high single-digit to double-digit profit growth over the next year, anticipating higher costs due to pursuing growth opportunities and implementing the 'Targeted Support' scheme. Maile concluded, "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."
