Quilter anticipates steady second half following strong first half performance

Quilter, the UK wealth manager with listings in London and on the JSE, increased first half profit by 3% to £100 million and anticipates the second half result to be much in line due to stepped up brand spend and business investment plans.

The interim dividend was raised 18% to 2 pence from 17 pence at the same time last year. Adjusted diluted earnings per share came to 5.4 pence, up 4% from 5.2 pence.

“We have delivered strong flow momentum across the business with core net inflows up 160% to £4.5 billion,” CEO Steven Levin said in a statement. The company reported an operating margin of 30% despite lower interest rates reducing investment income on shareholders' funds.

The company's Affluent business segment saw net inflows of 9% of opening assets (H1 2024: 5%), with the Platform flows maintaining strong momentum from the second half of 2024, with improved net promoter scores as well as winning awards for service. First half Platform net inflows were up 92% to £4.2bn.

The High Net Worth segment saw net inflows to 3% of opening assets. New inflows were stable at £1.5bn, with an easing of outflows leading to a much better performance at the net level of £464m (up from £107m).

A £76m provision was reduced to £70m after initial conversations with the UK financial services regulator about the Skilled Person Review of advice by appointed representative firms in the Quilter Financial Planning network.

Levin said once the ongoing advice remediation program was confirmed with the regulator, a review of capital needs would be undertaken at Quilter, to consider whether it has excess capital and if the current distribution strategy is appropriate.

He said the group was approaching the end of its second “Simplification” program, which by the end of June had delivered £43m of cost savings, and which were expected to deliver the remainder of the £50m target by end 2025.

Some 1 450 Quilter advisers wrote around £2.5bn of new business in the first half, broadly similar to 2024, and investments were being made to enhance client relationships with integrated support tools. The Advice Transformation program, to be implemented over the next couple of years, would also allow advisers to service a larger number of clients under a range of service and charging models.

The Advice Guidance Boundary Review regulatory changes, which introduce “Targeted Support” in the UK retail financial services market, should favour integrated firms like Quilter, which can use scale efficiencies in platform and investment solutions to deliver a targeted support proposition for clients.

“The acquisition of NuWealth last year allows us to accelerate development of a targeted support proposition for self-directed investors,” said Levin.

The High Net Worth business was planned to evolve from being largely investment-driven towards being recognised as a leading integrated wealth management business.

He said they believe there is significant opportunity in developing Quilter as a leading UK retail financial services brand, and sponsorship of the Quilter Nations Rugby Series later this year was a first step in establishing that connection.

He said the independent platform analysis company Fundscape expected that UK advised platform assets, which were around £680bn at the end of December 2024, to rise by around 70% by the end of 2029, in their base case.

“Convenience of use and easy access to flexible transparent solutions will ensure that the platform industry continues to be a natural custodian of wealth investments accumulated by UK households,” he said.

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