Quilter Profits Rise as Demand for Financial Advice Drives Record Net Inflows
Wealth management firm Quilter has reported a significant increase in profits and record net inflows, lifting its dividend as clients increasingly seek professional financial guidance. Shares in the company rose 1.8 per cent in morning trading following the announcement.
Financial Performance Highlights
Quilter, which is based in London and Southampton, posted a pre-tax profit of £207 million, up from £196 million the previous year. Assets under management and administration (AUMA) surged 18 per cent to £141.2 billion from £119.4 billion. This growth was fuelled by an 83 per cent jump in net inflows to £8.7 billion, alongside favourable market conditions.
Turnover edged up five per cent, with higher management fee income partially offset by reduced investment returns on shareholder capital. The board unveiled a £100 million share buyback scheme to be completed over the rest of the year and proposed a final dividend of 4.3 pence, taking the full-year total to 6.3 pence per share.
Division Performance and Strategic Moves
The firm's Affluent and High Net Worth divisions outperformed market rivals in terms of inflows. The Affluent division recorded a 22 per cent increase in AUMA to £107.6 billion, with net inflows climbing to £2.8 billion from £2.3 billion in its Quilter channel. Its Independent Financial Adviser (IFA) channel reported net inflows of £5.8 billion, up from £3 billion, reflecting expanded market share and assets won from rival platforms.
Meanwhile, the High Net Worth division saw net inflows of £0.7 billion. Chief Executive Officer Steven Levin noted that this division can "improve performance" and attract a broader customer base. Levin stated that the business is well placed to benefit from industry changes and boost overall growth.
Market Trends and Future Outlook
The transformation of UK personal tax legislation, including changes to pension contribution thresholds for higher earners and the introduction of inheritance tax on pensions from April 2027, has increased the need for personalised financial advice. This has led to heightened adviser activity as clients reassess their financial strategies.
Quilter anticipates a substantial rise in intergenerational wealth transfer over the coming decades, further boosting demand. Levin also highlighted the shift from a nation of savers to a nation of investors, with the organisation "well-positioned" to meet this need.
The firm is seeking approval from the Financial Conduct Authority to deploy its 'Targeted Support' framework, which will enable personalised recommendations without full regulated advice. Levin said, "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."
Analyst Insights and Compensation Update
Rae Maile, analyst at Panmure Liberum, commented, "The potential for future growth is unchanged given the usual certainties of death and taxes. AI cannot 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."
Maile added, "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."
Quilter confirmed that its bill for compensating clients who paid for financial advice but didn't receive it will be £20 million lower than initially anticipated, having previously earmarked £76 million following scrutiny from the City regulator.
The company anticipates high single-digit to double-digit growth in profit over the coming year, expecting elevated costs from pursuing growth opportunities and implementing the 'Targeted Support' scheme.
