Aj Bell Plc · LSE:AJB
Aj Bell — Investor Presentation (September 2020)
40 slides from Aj Bell's investor presentation, Sep 10, 2020
Slide 1: Platform propositions update
Platform propositions update 10 September 2020
Slide 2: Agenda
Agenda Title Page Presenter Andy Bell Introduction 3 Chief Executive Officer Fergus Lyons AJ Bell Investcentre update 7 Managing Director, AJ Bell Investcentre Charles Galbraith AJ Bell Youinvest update 24 Managing Director, AJ Bell Youinvest Q&A 38 Glossary 39 AJ Bell | Platform propositions update
Slide 3: Introduction – Andy Bell
DAJBell Introduction Andy Bell
Slide 4: Overview of AJ Bell
Overview of AJ Bell Co-founded by Andy Bell in 1995, AJ Bell is one of the largest Sustainable organic growth of AJ Bell investment platforms in the UK We operate in both the advised and direct to consumer (D2C) Customers (000s) 283 segments of the Platform market and our flagship platform 232 propo
Slide 5: Key investment highlights
Key investment highlights Key investment highlight Description Our market An attractive retail market within the UK savings and investment industry Our proposition An award-winning platform operating in both advised and D2C market segments Our customers A growing base of loyal, high quality customer
Slide 6: Our market
Our market An attractive retail market within the UK savings and investment industry Addressable market Growth • The addressable market for the investment UK platform market & AJ Bell AUA growth • Pension and net financial platforms in the UK is estimated to be worth at least £2.5 trillion, of which
Slide 7: AJ Bell Investcentre update – Fergus Lyons
AJ Bell Investcentre update Fergus Lyons
Slide 8: Introduction to AJ Bell Investcentre
Introduction to AJ Bell Investcentre • One of the UK’s fastest growing adviser platforms • Serves UK FCA authorised advisers with advisory or full discretionary permissions • A full product suite – SIPPs, RIAs, ISAs, Lifetime ISAs, general investment accounts, Junior SIPPs & ISAs and Offshore Bond a
Slide 9: Overview of AJ Bell Investcentre
Overview of AJ Bell Investcentre A track record of sustainable organic growth An award-winning platform 120,000 Customers (000s) 100,000 • Sustained organic growth has Money Marketing Awards 80,000 taken us from 36k customers Platform of the Year 2020 in 2012 to over 100k today 60,000 106 98 40,000
Slide 10: Advised platform market overview
Advised platform market overview A growth market Growth drivers 40.0 540.8 600.0 • Macro 35.0 AJ Bell Investcentre AUA (1) 500.0 –Growing market e.g. consolidation to platform and Advised market AUA 30.0 DB pension transfers 25.0 400.0 –Demographics – living longer, more to invest for longer 20.0 30
Slide 11: Advised platform market overview
Advised platform market overview The UK adviser market What is addressable for AJ Bell Investcentre? (2) Number of financial advice firms and staff advising on retail investment products (1) Firms 25,611 26,311 26,677 27,557 Advisers 5,218 5,281 5,246 5,236 AJ Bell Investcentre supporting advisers 2
Slide 12: Competitive landscape
Competitive landscape Competitive position as at 30 June 2020 Platform AUA(3) 20% £k = Size of bubble denotes average portfolio size(1) £142.7bn £61.2bn £108k £57.5bn n/d £39.7bn AUA Annual Growth(2) £210k £38.3bn £331k £35.2bn £99k £90bn n/d £30.2bn £159k £63k £128k £150bn £26.4bn £450k £15.8bn (5%
Slide 13: Advisers’ views of AJ Bell Investcentre
Advisers’ views of AJ Bell Investcentre A supportive adviser user base (1) Which of the following platforms would you consider for placing new business? (1) Source: Platforum UK Adviser Platforms Due Diligence, August 2020 AJ Bell | Platform propositions update 10 September 2020 13
Slide 14: Advisers’ views of AJ Bell Investcentre
Advisers’ views of AJ Bell Investcentre A supportive adviser user base (1) (1) Source: Platforum UK Adviser Platforms Spring Update, May 2020 AJ Bell | Platform propositions update 10 September 2020 14
Slide 15: Our customers
Our customers A high quality customer base • Our customers have a high average portfolio value, driven by our strong pension heritage • Our strong customer retention delivers high returns over the life of a customer 106,335 £35.2 billion of £331,000 customers assets under administration average port
Slide 16: Our proposition: adviser platform must have features
Our proposition Adviser platform must have features (1) When conducting due diligence or selecting a platform, what are the most important factors you or your firm consider? (1) Source: Platforum UK Adviser Platforms Due Diligence, August 2020 AJ Bell | Platform propositions update 10 September 2020
Slide 17: Our proposition: how we deliver the key features for advisers
Our proposition How we deliver the key features for advisers Factor Commentary • Highly competitive pricing across the full range of portfolio values following the Low charges launch of our Retirement Investment Account (RIA) in January 2020 • Total revenue margin of less than 20bps reflects our pri
Slide 18: Our proposition - pricing
Our proposition - pricing Highly competitive pricing across the full range of portfolio values following the launch of our RIA Commentary • Table opposite shows lang cat’s market comparison for pensions in accumulation phase – RIA is best value proposition at sub-£250k level • lang cat’s analysis is
Slide 19: Our proposition - service
Our proposition - service Strong service levels throughout COVID-19 pandemic recognised by advisers (1) Commentary • Service levels maintained during a challenging tax year end period: –98% of adviser phone calls answered in six rings –95% of emails answered within 24 hours –100% of new accounts ope
Slide 20: Our proposition – investment choice
Our proposition – investment choice Commentary • We offer a full range of investment options for advisers • This includes low cost AJ Bell investment solutions, both growth and income focused: – MPS (Active, Passive and Pactive) – AJ Bell Funds (Cautious through to Adventurous + Global growth) • Thi
Slide 21: Our proposition – investment choice
Our proposition – investment choice We have recently added a select list of third-party MPS solutions to the platform Commentary • Third-party MPS is an exciting addition to the platform, developed in response to adviser feedback • Sits alongside our in-house MPS options and multi-asset funds, givin
Slide 22: AJ Bell Investcentre new business acquisition
AJ Bell Investcentre new business acquisition Business development approach Adviser firm segmentation Supporting marketing activity • 7 regional teams covering the whole • Segmented evolving account • Multi-channel adviser engagement: of the UK model strategy: –Newsletters –Increasing number of –Vid
Slide 23: AJ Bell Investcentre outlook and opportunities
AJ Bell Investcentre outlook and opportunities • Structural growth drivers support long-term growth of our market– we are well positioned, offering award-winning service at a compelling price • Organic growth – we expect further industry consolidation but organic growth is the focus for AJ Bell Inve
Slide 24: AJ Bell Youinvest update – Charles Galbraith
AJ Bell Youinvest update Charles Galbraith
Slide 25: Introduction to AJ Bell Youinvest
Introduction to AJ Bell Youinvest • One of the UK’s fastest growing D2C online retail investment platforms • Execution-only platform – “investment guidance” provided but no “personal recommendations” (i.e. no regulated investment advice) • Wide range of wrappers – SIPPs, ISAs, Dealing accounts, LISA
Slide 26: Overview of AJ Bell Youinvest
Overview of AJ Bell Youinvest A track record of sustainable organic growth An award-winning platform 180,000 Customers (000s) • Customer numbers have 160,000 140,000 increased more than ten- 120,000 fold since 2012 100,000 80,000 162 144 120 • AUA has grown at a similar 60,000 95 40,000 20,000 30 41
Slide 27: D2C platform market overview
D2C platform market overview A fast-growing market Growth drivers 14.0 235.8 250.0 • Macro AJ Bell Youinvest AUA 209.6 –Retirement savings gap and increased life (1) 12.0 D2C market AUA expectancy 200.0 10.0 8.0 150.0 –Government encouragement to save and invest – higher ISA allowances, pension free
Slide 28: D2C platform market overview
D2C platform market overview Why do people save? Why do people adopt a platform? • Financial security, providing for retirement and for an • Convenience of managing investments in one place: unexpected event are the primary reasons –E.g. consolidation of workplace pension schemes, • The challenge is
Slide 29: Competitive landscape
Competitive landscape Competitive position as at 31 March 2020 Platform AUA(3) 40% £k = Size of bubble denotes average portfolio size(1) £86.2bn £80k £26.6bn £16.5bn AUA Annual Growth(2) £11.4bn £74k £30bn £90bn £10.6bn £90bn £59k £65k £10.5bn £22k £12k £21k £5.3bn £36k (25%) AUA (£bn) £4.3bn (1) So
Slide 30: Other potential competitive threats
Other potential competitive threats • ‘Fintech’ offerings –‘Commission free’ trading apps. E.g. Freetrade – strong customer growth but low customer account values –Simplified app-based propositions with innovative pricing structures, targeted at younger audience –Robo-advisers – building scale provi
Slide 31: Our aim is to be the easiest platform to use
Our proposition Our aim is to be the easiest platform to use Key features of AJ Bell Youinvest What’s new for AJ Bell Youinvest? • A competitive pricing strategy • Cash savings hub developed and in beta testing with • Intuitive customer website and mobile customers application • ‘New to investing’ w
Slide 32: Our customers rate AJ Bell Youinvest highly
Our proposition Our customers rate AJ Bell Youinvest highly 2020 customer survey feedback Strong customer advocacy How likely is it that you would recommend AJ Bell “Being a first time investor AJ Bell made it very simple and Youinvest to a friend or family member? (1) stress fee to open the account
Slide 33: AJ Bell Cash savings hub
AJ Bell Cash savings hub Our new Cash savings hub launching later in 2020 • Sits alongside customers’ investment accounts, enabling them to actively manage investments and cash savings in one place • Easy to move from one cash savings account to another without having to carry out AML checks and com
Slide 34: AJ Bell Youinvest marketing
AJ Bell Youinvest marketing Principal sources of business Marketing approach • Word of mouth • Our marketing messages focus on ease of use, value and helping the customer to invest • Group brand and PR activities • We have continued our marketing during COVID-19 crisis although stopped certain chann
Slide 35: Our customers
Our customers A high quality customer base • Younger customers on D2C platform, with average age of new customers in HY20 being 38 • High average portfolio values and strong retention rates, with significant cross-sell opportunities 162,109 £12.5 billion of £77,000 customers assets under administrat
Slide 36: Our customers
Our customers A changing customer profile COVID-19 has led to a change in behaviours • We are attracting less confident and inexperienced • Younger customers – March & April 2020 saw a rise customers who are starting their investing journey in applications from ‘first timers’ (35% of total • Big shi
Slide 37: AJ Bell Youinvest outlook and opportunities
AJ Bell Youinvest outlook and opportunities • Organic growth strategy – Large, growing market and room for further significant organic growth • Rapid technological change and innovation – we are set up to meet this challenge • AJ Bell Investment solutions - further penetration of our customers into
Slide 38: Q&A
DAJBell Q&A
Slide 39: Glossary
Glossary AML Anti Money Laundering ISA Individual Savings Account AUA Assets Under Administration LISA Lifetime Individual Savings Account BPS Basis Points OCF Ongoing Charges Figure CAGR Compound Annual Growth Rate MPS Managed Portfolio Service D2C Direct to Consumer PBT Profit Before Tax DB pensio
Slide 40: Disclaimer
Disclaimer The information contained in this presentation has not been independently verified and no representation or warranty, express or implied, is made as to, and no reliance should be placed on, the fairness, accuracy, completeness or correctness of the information or opinions contained in it.