Wealth manager and Fund platform AJ Bell came under the microscope at finnCap group as analyst Nik Lysiuk wrote on the stock following a presentation from the company.
With a market cap of £1.76 bln is less than a quarter of the size of rivals Hargreaves Lansdown however size may not be everything as AJ Bell’s stock price has comfortably outperformed its peers Hargreaves Lansdown stock is down by just over -14.0% year to date whilst The AJ bell share price has dipped by just 0.90% in that time.
The sector laggard is Brewin Dolphin whose shares are down by 38.00% YTD.
Finn Cap flag that AJ Bell has grown its market share from +3.90% to +6.50% since 2012 however there still some obstacles to overcome on the positive side for the 6 months ending 31st March 2020 the company grew revenue by 22% over the comparable period in 2019 and profit before tax grew by 28% and whilst the numbers of retail clients increased by 30,000 the amount of assets under administration that the firm addresses fell to £48.30 bln from £52.3 bln in 2019 just how much of that drop was down to withdrawals and how much to market performance may be revealed in the year-end trading update that is scheduled for October the 22nd.
Nik Lysiuk believes that AJ Bell can grow organically by leveraging their existing customer base through fund and investment performance referrals and top-ups etc though he also believes that there will be consolidation in the sector though that will lead to new starts up being formed as advisors and their clients leave and take their business with them.
However, AJ Bells’ major differentiator to much of its competition is its D2C or direct to consumer platform marketing style much beloved of millennials and younger generations.
Mr. Lysiuk feels that £5.0bn of AUA is the minimum that new rivals would need to reach critical mass in this space and large US house such as Vanguard could pose a threat they only offer their own funds thereby limiting customer choice, wide-ranging customer choice being one of the selling points of AJ Bells offer and that threat could be further deferred through
“The education of large addressable market of people that have cash but are not investors”
An area that Nik Lysiuk believes AJ bell should focus on from here on in.
With over 35 years of finance experience, Darren is a highly respected and knowledgeable industry expert. With an extensive career covering trading, sales, analytics and research, he has a vast knowledge covering every aspect of the financial markets.
During his career, Darren has acted for and advised major hedge funds and investment banks such as GLG, Thames River, Ruby Capital and CQS, Dresdner Kleinwort and HSBC.
In addition to the financial analysis and commentary he provides as an editor at GoodMoneyGuide.com, his work has been featured in publications including Fool.co.uk.
As well as extensive experience of writing financial commentary, he previously worked as a Market Research & Client Relationships Manager at Admiral Markets UK Ltd, before providing expert insights as a market analyst at Pepperstone.
Darren is an expert in areas like currency, CFDs, equities and derivatives and has authored over 260 guides on GoodMoneyGuide.com.
He has an aptitude for explaining trading concepts in a way that newcomers can understand, such as this guide to day trading Forex at Pepperstone.com
Darren has done interviews and analysis for companies like Queso, including an interview on technical trading levels.
A well known authority in the industry, he has provided interviews on Bloomberg (UK), CNBC (UK) Reuters (UK), Tiptv (UK), BNN (Canada) and Asharq Bloomberg Arabia.
