AJ Bell’s legacy runoff erased 63% of platform asset growth

AJ Bell's platform added £5.4 billion of assets under administration in the six months to 31 March 2026, but the group's reported total increased by only £2.0 billion. The difference was a £3.4 billion contraction in non-platform assets, which erased 63.0% of the platform gain. Closing platform AUA rose from £103.3 billion to £108.7 billion, while non-platform AUA fell from £4.9 billion to £1.5 billion. The company’s headline 2% total AUA growth is therefore not a clean measure of the platform's performance; it is the net result of strong platform inflows and a deliberate runoff or transfer in the legacy perimeter.[1][2]

This is a denominator problem with practical consequences. Investors, customers and competitors often use total AUA as a proxy for platform scale, fee potential and market share. AJ Bell's core platform did grow by 5%, supported by £4.2 billion of net inflows and £1.2 billion of favourable market movements. But the total group denominator still included a shrinking non-platform book. Comparing the 2% group growth with another platform's 5% growth without checking perimeter would understate AJ Bell's current platform momentum and overstate the persistence of its legacy assets.[1][2]

The group bridge is smaller than the platform bridge

The platform increase itself is also fully explained. Record net inflows of £4.2 billion and favourable market movements of £1.2 billion sum to the £5.4 billion increase. The non-platform decline was not disclosed as a £3.4 billion market loss. AJ Bell's appendices identify transfers and the continuing contraction of non-platform arrangements, including the effect of moving assets out of the old perimeter. Treating the decline as customer losses or investment underperformance would go beyond the evidence.[1][2]

Customer numbers show the same pattern in a smaller unit. Platform customers increased from 644,000 to 723,000, a gain of 79,000. Non-platform customers fell from 13,000 to 7,000, a decline of 6,000. The group added 73,000 customers overall. The legacy reduction therefore offset about 7.6% of the platform customer addition. The customer and asset bridges are not identical—non-platform accounts held much more AUA per remaining customer—but both demonstrate why a group total can conceal the direction of the operating franchise.[1]

AUA, AUM and revenue are different measures

AJ Bell's disclosure also distinguishes assets under administration from assets under management. Platform AUA includes assets administered for customers whether or not AJ Bell Investments manages the underlying portfolios. AJ Bell Investments reported £9.8 billion of AUM, up from £8.9 billion, after £0.6 billion of net inflows and £0.3 billion of market movements. It would be incorrect to add that £9.8 billion to platform AUA or to describe all £108.7 billion as managed by AJ Bell. The managed portfolios sit within the wider administered universe.[1]

The financial results add another layer. Revenue rose 19% to £183.0 million and underlying profit before tax rose 15% to £79.0 million. Statutory profit before tax increased more rapidly because it included a net exceptional gain. The release also records a lower underlying margin as AJ Bell invested in technology, brand and growth. AUA growth therefore should not be converted mechanically into current profit growth. Revenue yields, customer mix, cash balances, market levels and investment spending determine how administered assets reach the income statement.[1]

A more aggressive interpretation would say the legacy runoff diluted an otherwise stronger group story. That is arithmetically true but incomplete strategically. Moving away from non-platform arrangements can simplify operations, concentrate investment on scalable channels and remove lower-priority business. The £3.4 billion reduction may therefore reflect execution of the chosen model rather than weakness in the customer proposition. The evidence needed to judge the trade-off is the revenue and cost attached to the exited assets, which the AUA table does not isolate.[1]

The reporting question persists after the runoff

The non-platform book was already only £1.5 billion at the half-year, so its capacity to offset future platform growth is finite. That creates a likely change in the group denominator: once the legacy perimeter becomes immaterial, total AUA growth should track platform AUA more closely. Until then, analysts should preserve the bridge. A 2% group movement and a 5% platform movement are both correct, but they answer different questions.[1][2]

The next full-year report will allow a cleaner test. It can show whether the platform's strong inflows persisted, how much of the remaining non-platform book transferred or exited, and whether higher AUA translated into sustainable revenue after investment. AJ Bell's later year-end trading update indicated further platform growth, but the interim investigation remains useful because it identifies the mechanism that made the half-year headline look weaker than the core platform.[1]

Average assets per customer expose a different legacy shape

The remaining non-platform book was small by customer count but comparatively large per account. £1.5 billion across 7,000 non-platform customers implies roughly £214,000 per customer, while £108.7 billion across 723,000 platform customers implies about £150,000. These are crude averages, not account-level distributions, and customers can hold more than one account. They nevertheless explain why losing 6,000 legacy customers could remove £3.4 billion of AUA while the platform added far more customers. The legacy perimeter was asset-heavy relative to its headcount.[1]

That composition affects revenue as well as the AUA headline. A large legacy account may carry a lower fee, a negotiated institutional arrangement or a different service cost from a platform account. The filing does not provide the revenue attached to the £3.4 billion decline, so it would be wrong to apply the platform revenue margin to the exited assets. The economic loss could be smaller or larger than the AUA share suggests. Only a perimeter-specific revenue and cost bridge could settle it.[1]

AJ Bell's £4.2 billion of platform net inflows is a flow over six months, while £108.7 billion is a closing stock. Dividing the flow by the closing stock gives a rough 3.9%, but it is not the company's official annualised organic growth rate because the denominator changed through the period and market movements added £1.2 billion. Any comparison with a rival should use the same opening or average asset basis and the same treatment of transfers.[1][2]

The accounting result also cautions against treating statutory profit growth as a pure operating outcome. The net exceptional gain accelerated statutory profit beyond the underlying measure, while growth investment reduced the underlying margin. A reviewer therefore has to keep three bridges separate: platform versus legacy assets, flows versus market movements, and underlying versus statutory profit. Collapsing them into one growth percentage would obscure the mechanism the records actually show.[1]

The transfer of assets out of the non-platform perimeter also changes the apparent average account size over time. As smaller or larger accounts leave at different rates, dividing closing assets by closing customers can move even without investment performance. The rough per-customer figures are therefore diagnostic rather than valuation metrics. They support the conclusion that the legacy book was differently composed, but they do not identify individual account behaviour or fee yield.[1][2]

The documentary conclusion is narrow and defensible. AJ Bell's platform did not grow by only £2.0 billion. It grew by £5.4 billion. The smaller reported group increase resulted because £3.4 billion left the non-platform perimeter at the same time. Any assessment of customer momentum, platform competitiveness or revenue capacity must begin with that reconciliation rather than the consolidated headline alone.[1][2]

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