Aberdeen Group sticks to guns despite tariff turmoil as Interactive Investor blossoms: shares rise

Aberdeen Group has suffered fallout from the recent market turmoil but strong growth at its Interactive Investor business has helped offset some of the drag.

The Scottish funds giant, which recently ditched its derided Abrdn brand name, said it was fully committed to its targets for the 2026 financial year. That came despite assets under management and administration (AUMA) dipping to £500.1 billion in the first quarter, from £511.4bn at the tail end of last year, reflecting global stock market weakness and a previously flagged redemption.

However, the group’s latest trading update also highlighted strong organic growth at Interactive Investor, which was bought by Aberdeen for £1.5 billion in late 2021, with year-on-year increases in total customers of 9 per cent to 450,000 and a 29 per cent rise in self-invested personal pension (SIPP) clients to 88,000. The Interactive Investor business appears to have benefited from recent national advertising and marketing activity. There were strong inflows of £1.6bn at the platform during the quarter.

A sign at Abrdn's offices in Edinburgh's South Gyle area. The Scottish investment group is undergoing a rebrand from Abrdn to Aberdeen Group. Picture: Scott Reid

Adviser net outflows of £600 million were the lowest in more than a year as service levels improved. The previously highlighted £4.2bn redemption from a low-margin mandate was the main driver of net outflows of £6.4bn in the investments division.

Aberdeen said it remained committed to its 2026 targets of adjusted operating profit above £300m and net capital generation of around £300m.

Chief executive Jason Windsor said: “Our strategy is to become the UK’s leading wealth business and to reposition our investments business to areas of strength and market growth. So far this year, we have made good progress against these objectives, despite the current heightened levels of market uncertainty.

“Interactive Investor has seen significant growth in new customers, and in trading volumes, which have risen to record levels during the recent period of market volatility.

Jason Windsor is Aberdeen Group's chief executive.

“In adviser, net outflows improved in [the first quarter], and while there remains work to be done, we are encouraged by the business’s progress, most notably in meeting or exceeding client service targets.

“In Investments, [first quarter] flows were impacted by the large redemption we noted at our full year results. We saw good inflows in fixed income in the quarter, but outflows in equities remained elevated.

“A major quant win in April has taken [investments] net flows to positive in the year to date. With clear strategic priorities and an ongoing focus on efficiency, we continue to target a material uplift in profitability,” he added.

Shares nudged higher in Wednesday morning trading in London.

Analysts at Panmure Liberum noted: “The company has delivered assets under management in line with our estimates but with some significant signs of promise for the future.

“Activity levels at Interactive Investor have been strong and customer acquisition has continued. Adviser net outflows have slowed usefully on reduced redemptions. The investments [division] saw outflows as anticipated but has landed a material new mandate in April.

“The company has also reiterated its profit ambitions for [the 2026 financial year], which remain ahead of our estimates, despite recent market volatility. Improving business momentum underpins why we believe the shares to be materially undervalued.”

In March, the group announced that it was ditching the Abrdn name to become Aberdeen as it posted the first increase in annual profit for three years.

Former chief executive Stephen Bird, who stepped down in May 2024, led the change from Standard Life Aberdeen to Abrdn in 2021. However, announcing its 2024 full-year results, the Edinburgh-headquartered group said it would be changing its name to Aberdeen Group plc.

Windsor told investors: “This is a group to be proud of, with a promising future. We will deliver by looking forward with confidence and removing distractions. To that end, we are changing our name to Aberdeen Group. This is a pragmatic decision marking a new phase for the organisation, as we focus on delivering for our customers, people and shareholders.”

In 2021, the group said it planned to create new branding after the funds firm sealed a deal to sell the 196-year-old Standard Life brand to Phoenix Group. Insurer Phoenix Group had acquired Standard Life Assurance in 2018.

At the time, former boss Bird said: “Our new brand Abrdn builds on our heritage and is modern, dynamic and, most importantly, engaging for all of our client and customer channels.”

The results for 2024 revealed a full-year profit before tax of £251m, compared with a loss of £6m in 2023. Adjusted operating profit came in at £255m, up 2 per cent on the year before. At its investment arm, total assets under management and administration rose by 3 per cent to £511.4bn.

Windsor said: “The group grew profit in 2024 for the first time in three years, with each business increasing its contribution. As our momentum shifts to growth, we have a clear focus on improving client experience and shareholder returns.

“We have strengthened and streamlined our senior leadership team and, with our sharper focus, we are committing to better results again in 2025 and 2026. Alongside our results, we are setting out our strategy to become a leading wealth and investments group, with new 2026 targets that underline the potential for the profitable growth we see in all of our businesses.”

Jamie Elvin, director at Strive Mortgages, said of the recent rebranding: “Abrdn’s rebrand back to Aberdeen is a clear admission that the previous name change was a misstep. While the move may restore some investor confidence, it also highlights the costly risks of unnecessary corporate rebrands.”

Abrdn: Scottish funds giant unveils name rebrand, as new boss seeks to remove ‘distractions’