AJ Bell Float


#1

Currently up 33% since launch this morning!


#2

Nice. Must have been oversubscribed as I didn’t get the allocation I applied for but am happy I got some anyway!


#3

That’s a great valuation with only 183,482 customers (as of May 2018). Freetrade will have more than that before long.


(Big Boss) #4

I think their average AUM per customer is more than £200k or something (don’t quote me on this). That’s pretty punchy.


#5

AJ Bell grew their customer base by about 20% between 2017 and 2018 source. Customer / AUA for AJ Bell vs HL:

HL AJ Bell
Customers 1,091,000 197,912
AUA 91.6bn 46.2bn

I suspect a large portion of the AUA is from SIPPs, AJ Bell has a good rated offering.


(Rob N) #6

They have an advisory part of the business with clients at an average of £300k or so balances which pushes up their average.

Their D2C (direct to consumer) balances are around £90k, which is still high. The industry average is around £50k - and that’s across products like ISA’s, SIPP’s etc.

Most money is stored in pensions at AJ Bell:


#7

What’s the source for that very informative screengrab @Rob14 ?


(Rob N) #8

It’s from the AJ Bell IPO prospectus, as is the lovely chart below! (There’s also a factsheet there with fast info). I’ve had a flick through and the business seems to be doing really well as is the industry in general following pension freedom’s, growing appetite for investments along with stock market growth. IFA’s are losing out. But this may be built into the valuation.

Freetrade perhaps isn’t directly comparable as the customers will be smaller and it doesn’t charge percentage fees on assets (:clap:). So AUA (assets under administration) is less important. But then Freetrade can expand to Europe and eclipse their customer numbers with younger investors who share their good experience with each other and on social media and who build their investments for 40+ years! I don’t think another XO (exection only) stockbroker has expanded into Europe…


#9

Some interesting charts and numbers in those docs, thanks!

I guess the ii and ATS bubbles would move to the right a bit now that ATS has been bought.


(Rob N) #10

Yeah II will shift to the right after buying ATS. II acquired TD Direct a couple of years ago as well as other smaller brokers along the way. But it’s Interesting to see they’re declining, presumably these are TD Direct customers that don’t like II’s new offering.

I also noticed that AJ Bell’s IPO offering was only for AJ Bell customers (& institutional investors), you couldn’t buy from another broker!


#11

I have a question; does assets under management matter for making a broker money?

If a broker has £1billion AUM does it make more money than a broker with £100million?

I thought they made all their money on dealing and platform (any any other) fees?


#12

Yes for brokers that charge a percentage fee based on your holdings. Look at custody charge on AJ Bell’s pricing page, HL’s annual account charge, or all the robo advisor services.


#13

Ah yes of course, their platform fee is a % of your holdings. Another reason I like the Freetrade price structure. :slightly_smiling_face: