Edinburgh-based investment giant Aberdeen said its assets under management and administration (AUMA) fell to £500.1 billion in the first quarter from £511.4 billion at the end of 2024.

Aberdeen said the fall “reflected lower markets, with continued strong inflows at interactive investor of £1.6bn offset by net outflows in Investments and Adviser.”

The firm said its Investments business has been boosted by a £6 billion quantitative strategies mandate funding in April.

Aberdeen reported: “Strong organic growth was delivered in interactive investor, with year-on-year increases in total customers of 9% to 450k and 29% in SIPP customers to 88k; acquisition of small retail customer book announced on 15 April.  

“Restored service levels, enhanced platform functionality and repricing led to net outflows in Adviser of £(0.6)bn being over 30% better than Q1 and Q4 2024.

“The previously highlighted £(4.2)bn redemption from a low-margin mandate was the principal driver of net outflows of £(6.4)bn in Investments.

“Investments (I&RW) net flows are positive year to date, following a large quant win in April.”

In its outlook, Aberdeen said: “Last month we set out our ambition to be the UK’s leading Wealth & Investments group, and we are committed to the FY 2026 targets of adjusted operating profit above £300m, and net capital generation of c.£300m.

“Clear strategic priorities to transform performance, improve client experience and strengthen our talent and culture.

“On course to meet transformation target of at least £150m of annualised cost savings by the end of this year; Group COO to drive long-term benefits of transformation.

“ii on track to meet FY 2026 growth targets and deliver Managed SIPP, ii Advice, and ii 360 to further broaden customer appeal.

“Adviser service improvements and enhanced platform functionality support target to achieve at least £1bn of net inflows in FY 2026.

“Investments benefiting from a £6bn quantitative strategies mandate funding in April; FY 2026 targeting at least £100m of adjusted operating profit.”

In its Investments business, Aberdeen reported assets under management (AUM) of £359.6 billion (31 December 2024: £369.7bn) with movement in the quarter reflecting net outflows and lower markets.

This included a £4.2 billion outflow from a single mandate redemption for Phoenix “with negligible impact on FY 2025 revenue.”

It said: “Net outflows of £(6.4)bn, driven by £(4.2)bn low-margin mandate redemption, as previously announced (£(3.7)bn reflected in Institutional & Retail Wealth (“I&RW”) and £(0.5)bn in Insurance Partners).

“Gross inflows in I&RW (ex- liquidity) of £8.9bn at highest level for over 2 years and 30% higher than Q4 2024.

“Equity net outflows of £(3.3)bn include £(0.7)bn from previously announced fund merger, as well as an additional £(0.7)bn mandate redemption that will have a negligible revenue impact.

“Strong performance in fixed income, with net inflows of £1.5bn in the quarter benefiting from a significant European pension client mandate win.”

On its interactive investor business, Aberdeen said AUMA rose to £77.7bn (31 December 2024: £77.5bn), “reflecting £1.6bn of net inflows and sustained customer growth: total customers up 9% year-on-year to 450k and SIPP customers up 29% to 88k.”

Daily average retail trades were up 19% and 15% versus Q1 and Q4 2024, respectively.

Customer cash balances were £6.8 billion up 10% compared to the end of 2024.

“Early performance in Q2 characterised by continuation of strong inflows, elevated daily trading volumes and higher customer cash balances.

“On 15 April, ii announced the acquisition of Jarvis Management Limited’s direct-to-consumer retail book. The acquisition, expected to complete in Q3, is for a consideration of up to £11m, and is expected to bring between 20-30k long-term customers along with c.£1bn of assets.”

On its Adviser business, Aberdeen said: “Outflows reducing and service levels back to long term average, with further improvements expected …

“AUMA of £73.7bn (31 December 2024: £75.2bn), primarily reflecting lower markets.

“Net outflows of £(0.6)bn were an improvement on Q1 and Q4 2024 (outflows of £(0.9)bn in both periods) and at their lowest level since Q3 2023.

“Significant progress made towards our goal of delivering market-leading service levels as part of our broader priority of returning to net inflows as soon as possible; further supported by an improving new business pipeline.”

Aberdeen CEO 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.

“In Adviser, net outflows improved in Q1, 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, Q1 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 I&RW 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.”