Street Calls of the Week
Aberdeen Group PLC’s earnings call for Q3 2025 highlighted a robust performance with significant asset growth and strategic product launches. The $4.8 billion market cap company demonstrated a strong market position with a 6% increase in assets under management and administration (AUMA) year-to-date. The stock saw a modest rise of 0.29%, closing at 242, contributing to an impressive 52.87% year-to-date return. According to InvestingPro analysis, Aberdeen currently appears undervalued, offering an attractive 7.34% dividend yield.
Key Takeaways
- Aberdeen’s AUMA rose to £542 billion, a 6% increase year-to-date.
- Interactive Investor reported net inflows of £1.9 billion, a 58% increase from last year.
- The company launched two new active ETFs and plans further product innovations.
- Stock price rose by 0.29%, reflecting investor confidence.
Company Performance
Aberdeen Group PLC reported a substantial increase in its assets, with Group AUMA reaching £542 billion, up 6% year-to-date. Interactive Investor, a key segment, saw its assets rise to £93 billion, bolstered by significant net inflows. The Advisor and Investments segments also showed improvements, with reduced net outflows compared to the previous year. This performance underscores Aberdeen’s strong market presence and effective asset management strategies.
Financial Highlights
- Group AUMA: £542 billion, up 6% year-to-date
- Interactive Investor AUMA: £93 billion
- Advisor Assets: £79 billion, a 5% increase
- Investments Assets: £382 billion, a 3% increase
- Net Inflows for Interactive Investor: £1.9 billion, a 58% increase year-on-year
- Net Outflows in Advisor: £500 million, a 50% improvement from Q3 last year
- Net Outflows in Investments: £1.8 billion, nearly halved from Q3 last year
Outlook & Guidance
Looking forward, Aberdeen is targeting net flows of £1 billion by 2026 in the Advisor segment. The company anticipates a £4.5 billion redemption from a quants mandate in the fourth quarter. Despite this, Aberdeen remains confident in meeting its 2026 targets across all business segments, driven by strategic initiatives and product innovations.
Executive Commentary
CEO Jason Windsor expressed confidence in Aberdeen’s prospects, stating, "We are confident in our prospects as a Wealth and Investments group." CFO Siobhan Boylan added, "We continue to see the business delivering in line with our plan and targets." These statements reflect the management’s positive outlook and strategic focus.
Risks and Challenges
- Potential impacts from budget changes on pension investments.
- Equity outflow challenges, particularly in Asian markets.
- Anticipated £4.5 billion redemption from quants mandate in Q4.
Aberdeen Group PLC’s Q3 2025 performance highlights its strong market position and strategic growth initiatives. Trading at a P/E ratio of 11.56, the company’s focus on innovation and efficiency improvements positions it well for future success, despite potential challenges in the market. For deeper insights into Aberdeen’s valuation and growth prospects, including exclusive ProTips and comprehensive financial analysis, visit InvestingPro.
Full transcript - Aberdeen Group PLC (ABDN) Q3 2025:
Call Moderator: Good morning, and welcome to the Aberdeen Q3 AUMA and Close Trading Update. I will now hand over to Chief Executive Officer, Jason Windsor. Please go ahead.
Jason Windsor, Chief Executive Officer, Aberdeen: Thank you. Good morning, everyone, and thanks very much for joining our Q3 call. With me today is our CFO, Siobhan Boylan. It’s been another good quarter we implement the plan we set out in March. Net flows and other key operational metrics improved year on year, and group AUMA of GBP $542,000,000,000 is up 6% year to date, benefiting from positive markets.
In Interactive Investor, there has been continued strong performance across the board, and the team has done a terrific job sustaining growth in customers and assets. We have a pipeline of innovative new propositions. And with increasing brand awareness, II is very well positioned to sustain this positive momentum. In Advisor, customer service has again improved and net flows were 50% better than in Q3 last year, but we are still in outflow. So looking ahead, we remain focused on returning to growth and achieving our 2026 net flows target of £1,000,000,000 And in investments, while equities remains and flows in equities remain challenging, we have seen encouraging net inflows in fixed income around real assets as well as in quants and commodities.
As a result, we are confident in our prospects as a Wealth and Investments group with the growth potential across all three of our businesses reflected in our 2026 targets. And with that, I’ll hand over to Siobhan to take you through a little more detail.
Siobhan Boylan, Chief Financial Officer, Aberdeen: Thanks, Jason, and good morning, everyone. Beginning with II, where momentum pleasingly remains strong across all key metrics. Total customers reached 492,000, including the expected circa 20,000 from Jarvis. Excluding this acquisition, organic growth was 10%. This is ahead of our 8% target.
Strong momentum was also seen in higher value SIPS with transfers in record levels in the quarter and customers rising to 98,000, up 29% versus Q3 last year. During Q3, customers continued to increase engagement with the platform’s global trading and FX capabilities. Daily average trading volumes were up 43% and hit a record of 26,600 in the quarter. Net inflows of GBP 1,900,000,000.0 were up 58% year on year. Combined with the completion of the Jarvis acquisition and positive markets, AUMA increased to £93,000,000,000 As we outlined at the Spotlight event, building the II brand is a key lever to drive our future growth.
It is encouraging that brand awareness increased to 32% in Q3. This is up from 25% in Q4 and 18% in Q1 last year. We launched our new campaign last week to continue to raise brand awareness. In summary, II remains very well positioned to deliver against its 2026 targets given the strong inflows, growing customer numbers, increasing customer engagement and the new propositions that are due to go live in the near future. In Advisor, assets increased 5% to £79,000,000,000 reflecting positive markets.
Net outflows in the quarter improved by 50% to 500,000,000 compared to Q3 last year. This reflects our strategic repricing earlier this year and our continued progress in improving service levels. As a result, our Net Promoter Score increased to 45 points year to date, five points ahead of our target and two points higher than at half one. Turning now to Investments. Assets increased 3% to £382,000,000,000 with market performance offsetting net outflows.
Pounds 1,800,000,000.0 of net outflows in the quarter were almost half the level of Q3 last year. This included insurance partner outflows of £1,100,000,000 principally reflecting Phoenix’s heritage business in runoff. Net inflows in Institutional and Retail Wealth, excluding liquidity, improved by £2,900,000,000 year on year to £200,000,000 This reflects higher gross inflows in Fixed Income and Commodities. Redemptions in Equities also improved significantly but remained elevated with net outflows of £1,600,000,000 In the quarter, we launched two further active ETFs on the London Stock Exchange. Our global ETF product suite now has reached circa £12,000,000,000 of assets under management.
In September, Pfenex announced their intention to in source £20,000,000,000 of shareholder assets. This is subject to a three years notice period. We are working with Pfenex to manage this transition collaboratively and continue to have a strong relationship as their key asset management strategic partner. And as Pfenex have indicated, we have the potential to attract a greater share of their policyholder business as they consolidate their asset manager partners. Looking ahead, we are expecting a circa £4,500,000,000 redemption from a quants mandate in Q4 as a result of a client driven asset allocation change.
Given the low margins on this business, this will have minimal revenue impact. Turning back to the outlook for the group. We remain focused on improving efficiency across the group. Our transformation program is on track.
Jason Windsor, Chief Executive Officer, Aberdeen: And as Jason said at the start,
Siobhan Boylan, Chief Financial Officer, Aberdeen: we are confident in the outlook for the group. We continue to see the business delivering in line with our plan and targets set for 2026. I will now hand over to the operator, and Jason and I will be very pleased to answer your questions.
Call Moderator: Thank you. We will now take our first question from Herbert Lam of Bank of America.
Herbert Lam, Analyst, Bank of America: I’ve got three of them. Firstly, on the Pfizer, outflows seem to have gone backwards quarter on quarter. Can you talk a bit about what’s going on here? Is this seasonality? Or is there some uncertainty around The U.
K. Budget causing outflows in Pfizer to weaken in the quarter? Second question is on equity outflows. They still continue to be quite stark despite good markets. So do you think do you attribute this to like general industry trends or mainly also due to your fund performance?
And any update on fund performance also in the quarter would be appreciated. And lastly, if you could just give us an update on some of these initiatives you talked about on II, including advice? Just
David McCormack, Analyst, Deutsche Numis: what’s
Herbert Lam, Analyst, Bank of America: the latest progress on them? And when should we expect them to start to bear fruit?
Jason Windsor, Chief Executive Officer, Aberdeen: Hubert, thanks for the questions. I’ll start with the II initiatives. We went through those with you in Manchester a couple of months ago. I think they’re all proceeding to plan. We’ve got to cut through a little bit of final red tape, I’ll put it like that, to get them actually launched into the market, but they are either in advanced beta testing or in pilot mode across each one of the three that we talked about.
For those of that can’t remember, that is II Advice, the managed SIP and II360, which is the advanced platform trading system. We think that’s all to the good to broaden the net into Interactive Investor and to meet the growing customer needs. So that is very much on the slate. I’ll make a couple of comments on the other two questions. I’m sure you all might want to add into that.
I think in adviser, we do point to, obviously, the improvement quarter on Q3 on Q3. And clearly, we are worse than where we were in Q2. We see sort of steady improvement in inflows and then in gross flows in. We’ve seen a little bit more outflow perhaps than we expected in Q3, not really to other platforms. We’re actually much better year to date in terms of transfers from our platform to other industry platforms, just under £1,000,000,000 better.
It is one quarter. It is better than last year. We do continue to push hard to improve it. Everybody here at Aberdeen is very much focused on getting back to that net positive flow target for 2026. But there’s more to do, frankly.
Yes. And I think I don’t want to overstate this point, but I’ll mention it, that we have seen a little bit of uncertainty and cash being taken out of pensions ahead of the budget. We’ll see that could play out a little bit further depending how the chance to kind of manage the media to a degree because there is uncertainty that is persisting. Equities, it was a tough quarter. We are I keep making this point, we are changing the shop fronts such that it’s the most relevant that it can be.
We’ve seen real uptick in market levels, particularly in Asia Pac and emerging markets. We’ve not seen the flows. I think it’s an industry matter, and we’ve had a couple of reallocations away from us. So there’s clearly further work to do there. I think performance is better in Q3 than we reported at the half year.
We aren’t giving the precise numbers. So we’ve had a better quarter, which is good, but there’s still further to go. So the three year numbers obviously take a time for that to come through. But the year to date performance is showing signs across the board of improvement.
Siobhan Boylan, Chief Financial Officer, Aberdeen: Yes. I think the only thing I’d add on, it is mainly Asian equities, where you’re seeing the equity outflows. But we are seeing a more global reallocation, asset allocation back into Asian equities. So we may start to see some of that come through. On the adviser flows, as Jason said, there’s nothing if you look at the gross flows inflows, they are remaining steady.
You’d expect we will see some of the supercharged pricing deals that we did at the beginning of the year come through this quarter and next. And on the outflow side, there’s nothing there’s no there’s a number of factors. There’s nothing really to attribute those outflows to. That’s a 0.2 in the quarter, a little bit of seasonality, a little bit of cash out as you would expect. REPRESENTATIVE:]
Analyst: Great questions. Just a couple on AI, if I may, please. So one on brokerage was clearly very, very strong over the quarter. Can you give us some color on whether you expect also the margin, these volumes to be up, perhaps more FX trading? Or just to help us understand whether the profitability of brokerage clients has also been strong over the quarter?
That’s my first question. My second question is a bit more general on competition. Can you just give us your view on how you see the competitive landscape B2C investing in The U. K. Evolving?
And then finally, just your thoughts on the budget. I know you just you already mentioned that you saw some impact of that in Advisor, but perhaps you think the business is positioned for some of the key changes that have been rumored such as the removal or lowering the amount that you can put in a cash ISA or introducing a minimum level of investments in, for example, in U. K. Equities? So how do you plan to position the business to benefit from these?
Jason Windsor, Chief Executive Officer, Aberdeen: Okay. Do you want take the first one, Shavon, on Yes. The
Siobhan Boylan, Chief Financial Officer, Aberdeen: So thank you for your question. The we have seen strong FX trading, and that is coming through in the income. So it is primarily due to international trading, so international equities. So we’ve seen a spike in volatility mainly
David McCormack, Analyst, Deutsche Numis: in
Siobhan Boylan, Chief Financial Officer, Aberdeen: the back half of Q3 and coming into Q4, start of Q4.
Jason Windsor, Chief Executive Officer, Aberdeen: I think in the competitive part of the market, you’ve got sort of two forces at work. The actual long term savings part of the platform is dominated by four players. I think we were number one in terms of net flows last year and again in the first half. Net flows is not necessarily how we always measure our success because customer growth is fundamental. But if you look at the top four, I won’t name check them, but it’s pretty obvious.
I don’t know the number, but that’s well over 90% of the market. There’s a real consolidation that has played out in that part of the longer term savings part of the market, SIPs and ISIS. And on the brokerage side, there are more neo brokers and competitors that with different business models, some of them that don’t really work in The UK, some of them that have had some success, some that work with CFDs and crypto and a bit more esoteric products that we’re not So we’re faithful to our customer propositions, doing the right thing for long term savings. We’ve really got a strong reputation, and we’re not going to put that at risk the way that we trade. And we feel that the brand awareness is largely coming through better customer recommendations.
And actually, the day to day service that is really benefiting and creating the growth step up. So it is competitive, but we are we’re fighting hard and we’re winning. I think on the budget, we can speculate all day long. The kite flying exercise is kind of painful. What I want is stability and confidence and the chancellor making the right steps for the U.
K, Inc, which will allow confidence in U. K. Consumers to invest for the long term, either in The U. K. Or internationally.
We’ve never been supportive of trying to direct the traffic. With an operation, that would be quite difficult, and I’m not sure it’s the right thing. But with a better set of with a better U. K. Economy, there will be more direct investment from U.
K. Retail, in particular, where II is the number one provider of trading in U. K. Retail into U. K.
Equities. And we’ve seen some of that in the last quarter. We’ve also seen quite a lot of activity in The U. S, but we want to stay investment agnostic and customer focused.
Call Moderator: Thank you. And our next question comes from Nicolas Herrmann of Citi. Please go ahead.
Nicolas Herrmann, Analyst, Citi: Yes. Good morning. Thanks for the call for taking my questions. Couple for me, please. Markets have clearly been very supportive since early April.
Said that you are confident on your targets, and can understand that. If the markets remain supportive, it seems possible that you could quickly get to a position of exceeding your target. So in that context, how should we and investors think about the marginal cost income for your business over and above your targets? And clearly, there is variable compensation, but presumably, you’d also increase growth investments, too. So could you provide some broad quantitative guidance on marginal cost income, either at group level or segment level?
Would be helpful. And then on the NII, for the marketing campaign, will I guess, will marketing incentives be similar to that in prior campaigns? Can you please quantify customer acquisition from recent marketing campaigns or II? And is it fair to say that as brand recognition has improved over time, your marketing campaigns have also become more effective over time?
Jason Windsor, Chief Executive Officer, Aberdeen: Okay. Well, on the targets, I think it’s the first time I’ve been asked, are we going to exceed them, which is new one. We are continuing to work toward them. They are our targets for the group, profit and capital generation. There was always some ambition in them.
And we continue to see better performance in NII. And we’re taking more time in investments and adviser to come through. I think that’s pretty evident in Q3 in the year to date trends. So there might be a slight mix change, but that is the numbers, and we’re certainly not signaling higher targets. The costincome ratios, it’s very I’ve shied away from trying to generalize at the group level, so I don’t think you can.
I think II’s efficiency remains very strong, and it’s a key part of their success. And you can see we have a clear cost of asset target as part of that. With the sale of Efpal, that actually makes it even slightly more efficient in terms of cost of assets. So you can see you can do those numbers, but I can’t we’ll restate that once the FPL deal closes in Q1. Advisor, you can see those trends come through in the half year.
I think we flagged a revenue margin of 27 ish basis points through that. That is going to continue under pressure, and we’re going to continue to push on the cost side to maintain the level of profitability. The harder one to manage, of course, is investments, where we’ve taken out a considerable amount of cost, but we’ve also seen considerable revenue pressure, mainly through mix change. Product to product is actually reasonably consistent, but we’ve growth in the lower margin side, growth in fixed income, growth in quant and liquidity. So we’re continuing to push the growth strategy through in investments.
It’s fundamental to us being more profitable in our investment business is achieving better net flows, frankly, across the board. But we I deliberately not set costincome targets just because it’s quite hard to manage. On the II marketing, sorry, there’s a second question. Was just unpicking my scrawled notes. We’ve reset the brand with a new campaign, which is to try and, again, broaden the name recognition.
For a business that was number one in net flows, we’re miles behind on the equivalent brand recognition. So as I said in Manchester, and I can repeat now, that’s frankly I’d rather be that way around because that shows that we’ve got more growth potential within II as the brand recognition improves. I just said customer recommendations are really important. II community was a great addition to the platform. That’s helpful.
And it allows people to, a, be engaged and b, talk about the experience that they’re having. The it’s early days. We only I think we launched it ten days ago. So we’re not sort of flagging yet the net progress on it. But what you should see is a sign that we continue to really believe in the brand, and we’re really going to back it and make the investment necessary for us to drive the growth into 2026 and beyond.
Siobhan Boylan, Chief Financial Officer, Aberdeen: And you can see, obviously, the growth in the organic growth. Our target was 8%, and it’s coming through at 10%. So that’s before the brand campaign. So that will you’ll see that growth come through REPRESENTATIVE:] as a result of that increased brand awareness.
Analyst: But is it fair to
Nicolas Herrmann, Analyst, Citi: say that your the efficiency of marketing campaigns has been improving in time as that brand has been picking up?
Siobhan Boylan, Chief Financial Officer, Aberdeen: Think the way I would look at it if you think about our cost per AUA, it’s that metric, which obviously includes the marketing campaign, is the one we focus on. When you take out AFPal, that falls below 20 basis points. So that’s the key metric we look at.
Jason Windsor, Chief Executive Officer, Aberdeen: Yes. There’s two parts to marketing, of course. There’s the so called above the line brand investment, which is
Analyst: of is. And then there’s
Jason Windsor, Chief Executive Officer, Aberdeen: the more product incentives. We are getting better at product incentives to and you can see that in the transfer numbers. We’re not the only people to work this out, but you start to tailor that, your personalization, your targeting does become more efficient and the cost per account therefore benefits from that.
David McCormack, Analyst, Deutsche Numis: Got it. Thank you.
Call Moderator: Thank you. And we’ll move on to our next question from David McCormack of Deutsche Numis. Please go ahead.
Nicolas Herrmann, Analyst, Citi: Good morning, everyone. Just one question for me, please. Can you give us an update on where you are
David McCormack, Analyst, Deutsche Numis: with the time line for the new Chairman? Thank you.
Jason Windsor, Chief Executive Officer, Aberdeen: Unfortunately, no, there is no update that we are able to provide today, David. I’m sorry about that. But that’s where we are. It is the process that’s being managed by the Board, and we’re not providing any update today.
Nicolas Herrmann, Analyst, Citi: Okay. Thank you.
Call Moderator: Thank you. And we’ll take our next question from Gregory Simpson of BNP Paribas. Please go ahead.
David McCormack, Analyst, Deutsche Numis: Yes. Hi, good morning. Just on Pfenex, does the three year notice period mean the €20,000,000,000 comes out all at once in three years’ time? Can you give us a sense of the market share opportunity in that policyholder business? That’s the first question.
Second one is just on financial planning. I think the CMD should have a minus CHF8 million operating profit last year. Is that kind of the right magnitude for thinking about the factory impact from the sale? And then thirdly, on the Java still, is that kind of more like that you could you can do in terms of the tail of The UK DTC platforms that could be kind of acquired or picked up? Yes.
Siobhan Boylan, Chief Financial Officer, Aberdeen: If I take the Pfenex one, yes, it is subject to a three year notice period. So clearly, with all those sorts of things, you do work through it. So but it is the three years you should use as a guide. In terms of FPAL, I think the from an operating profit perspective, I think it was about £12,000,000 of revenue in the first half, but the operating profit is zero. So that kind of gives you an idea of the size of the impact for AFPAL going forward.
Jason Windsor, Chief Executive Officer, Aberdeen: I think you had two other points. On the Phoenix inflows, I think there are some, it’s a big complex account. We remain very supportive. We’ve run some, we lose some, there’s reallocations. There’s all sorts of things going on.
They are trying to consolidate their asset management providers, and we are well placed within that. There’s so much ins and outs. We’ve got like, I can’t remember the number now, somewhere between 12,000,000,000 and £14,000,000,000 of inflows this year and obviously more outflows. There’s a lot going on, but we are continuing to be well placed to win that. But their asset management model is evolving, and you’ve seen that as they’ve announced.
And so on the policyholder side, though, we do expect to win more assets over time. That’s a sort of two- to three year view. Jarvis, is there more well, we’d like to think so. There’s nothing that we’re sitting on, though. So we did see something similar that allowed a very clear acquisition approach.
So what we drove is, just to be crystal clear, we didn’t buy a platform. We bought a customer book and that they all transitioned to II accounts. So there’s a real simplicity benefit there. They become II customers. We will lose a few of the Jarvis customers part of that, and they got subscription free period to allow them to make the decision whether II is the right place for them or they might choose to go elsewhere.
Call Moderator: Thank you. There are no further questions in queue. I will now hand it back to Jason for closing remarks.
Jason Windsor, Chief Executive Officer, Aberdeen: Okay. Well, thank you all very much for joining. As we’ve said, it’s been an encouraging quarter. We are, particularly in II, where we’ve seen real growth in customer numbers and assets, We continue to work very much toward the strategy, the plan that we set out in March, and we are pleased to announce where we’ve got to today, and we’ll continue to engage with you all. Any further questions, please do not hesitate to call Duncan and his team in IR.
Thank you very much.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.