Quilter’s Profits Soar, But Wealth Managers’ Assets Plunge Amid ‘Extremely Challenging’ Markets
- The asset manager reported a 9% gain in the first half of the year
- Net inflows fell from £2bn to £1.4bn, while assets fell 12%
- Shares fell 4% on Wednesday morning after a short-lived rally last week
Quilter shares fell Wednesday after soaring earnings in the first half were overshadowed by a sharp drop in the group’s total assets.
The asset manager achieved a 9 per cent increase in adjusted profit to £61 million thanks to largely flat sales and cost discipline.
But despite net investor inflows of £1.4bn, assets under management and administration fell 12 percent to £97.8bn due to ‘adverse market movements’.
Quilter boss Paul Feeney said the past six months had been ‘extremely challenging’
Investment platform inflows fell £200m to £1.6bn as a result of a broader slowdown in new client flows in the second quarter.
However, cash flows from the high net worth segment increased slightly to £500m compared to £400m last year.
Chief executive Paul Feeney said: “Operational conditions in the first six months of 2022 were challenging. Global equity markets have experienced some of the worst periods of negative performance in recent years and traditional 60:40 multi-asset portfolios have had their biggest negative year-to-date returns ever.”
Net asset outflows on third party platforms were £600m, up from £300m the previous year.
Quilter said the decline reflected the end of its past non-core businesses, as well as the transition of assets advised by Quilter Financial Planning on other platforms to the Quilter investment platform.
Quilter shares fell more than 4 percent to 114.8 pence by noon on Wednesday.
The group’s stock price briefly recovered last week after news that Natwest was considering a takeover, but the stock is still down 35 percent to date.
Quilter said: “The cost of living and inflationary pressures, coupled with the geopolitical shock of the Russian invasion of Ukraine, created extremely challenging market conditions and led to a decline in consumer confidence, impacting investment inflows. In addition, competition continues to increase in our key markets.
“These conditions pose challenges to short-term financial performance and the pace at which our strategy is being delivered.”
Quilter also reported that it had made good progress in building platform flows from IFA firms, with 80 consulting firms using the platform in the past six months.