London-based Quilter, which retailed a greater percentage of its clients in 2020, says it is a month away from completing the migration of assets to a new UK investment platform, in a move to increase client cash flows.
Quilter, listed in London and Johannesburg, is in the midst of positioning itself as one the UK’s go-to shepherds of the super-rich’s money, and has spent about £500m (R10bn) on a new technology platform that offers easier and more secure management of assets.
Quilter, which was hived off from Old Mutual in 2018 in a four-way break-up of the former financial services conglomerate, said in a trading update on Tuesday it transferred £50bn in UK investment platform assets — or 80% — to its new platform by the end of December. The remaining 20% is expected to be transferred by the end of February.
The UK Platform will be “transformational for Quilter, said CEO Paul Feeney, with the group having said in its interim results that half the firms who were in the initial migration to the platform had seen increased net client cash flows, while there had been encouraging take up of some of the products the group could now offer.
Quilter had terminated a contract and switched IT providers in 2017 after spending £330m, at the time estimating the cost of replacing the provider at as much as £160m. In its interim results to end-June 2020, the group said the cost of the project extension had again increased, to an expected £200m.
Feeney on Tuesday said the group's advice-based model had fared well during market volatility, and the group had retained 92% of its clients in 2020, from 88% in 2019.
“I am particularly pleased by the consistent performance of our UK Platform throughout the year and with it delivering a good final quarter despite the major migration completing at the end of November,” Feeney said.
Improved client flows
Assets under management and administration rose 7.1% to £117.8bn (R2.46-trillion) in its year to end-December, in spite of sales falling 11.4% to £10.9bn in the year,
Net client cash flows rose to £1.6bn, from £300m previously.
Quilter was delivering on its strategy, which would improve its growth and client retention, said Avior Capital Markets head of research Warwick Bam, adding its new platform would help with the group's additional emphasis on cost control.
Quilter's share buyback, and its balance sheet strength, provided management with options in increasing returns to shareholders, said Bam.
Since October 13, Quilter has bought around 13.7-million of its shares, at a cost of about £17.87m, and representing less than 1% of its shares in issue.
In afternoon trade on Tuesday Quilter's share up 3.21% to R32.76, on track for its best day in over a month, and having risen about 7% over the past twelve months.
Update: January 26 2020
This article has been updated with information throughout
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.