Abrdn sees persistent outflows in investments and adviser divisions

24th Oct 2024 09:24

(Sharecast News) - Abrdn shares were sliding on Thursday morning, after it said in an update that it continued to experience outflows in its investments and adviser divisions in the third quarter, despite efforts to address the challenges.

The FTSE 250 company reported a 2% increase in assets under management and administration for the year-to-date to £507bn, supported by positive market movements and strong net inflows in its Interactive Investor platform.

It said the investments division saw its assets under management increase slightly to £368bn, with year-to-date net outflows reduced to £4.5bn compared to £13.5bn in the same period last year.

Outflows were concentrated in equities, particularly in Asia and emerging markets, reflecting broader sectoral trends.

Inflows were recorded in real assets, with £1bn in net inflows during the quarter, including the launch of a £0.4bn European infrastructure fund and a £0.6bn Japanese real estate mandate.

The adviser business reported a 2% rise in assets under management and administration to £75.1bn year-to-date, but net outflows persisted at £1bn in the third quarter.

Abrdn said it was taking steps to address those outflows, including strategic re-pricing, technology investment, and service improvements.

However, it acknowledged that the full benefits of the actions would take time to materialise.

Interactive Investor, the group's direct-to-consumer platform, continued to perform strongly, with assets under management and administration up 13% year-to-date to £74.5bn.

Customer numbers grew 6% year-to-date, reaching 430,000, with net inflows of £1.2bn in the third quarter - double the amount seen in the same period last year.

Abrdn said its transformation programme remained on track, with the company targeting £60m in cost savings for the 2024 financial year, and at least £150m annualised savings by the end of 2025.

The company said it was continuing to explore options regarding its defined benefit pension scheme, with further updates expected in its full-year results.

"Today's update shows strong performance in parts of our group; however, it also underlines the importance of delivering on the priorities I set out at the half year," said chief executive officer Jason Windsor.

"I'm pleased with the continued growth in Interactive Investor; meanwhile, there are challenges to overcome in Adviser, where we aim to return to being the platform of choice for clients.

"In investments, we need to do more to capitalise on our strengths and improve performance and flows, particularly in equities."

Windsor said the company had "strong, scale positions in attractive markets", adding that each of its businesses has headroom to grow.

"Our priorities remain to transform performance, improve the client experience, and strengthen our talent and culture.

"We have plans in place to address our challenges and our transformation programme is on track.

"While there remains much to do, I am confident that we have great talent and we can make further progress towards profitable and sustainable long-term growth, benefiting our shareholders, clients, and colleagues."

At 0915 BST, shares in Abrdn were down 8.6% at 149.65p.

Reporting by Josh White for Sharecast.com.