What abrdn (ABDN) Said on Its Q3 Earnings Call

Key Points

• abrdn’s assets under management and administration rose 4% year to date to £579 billion, supported mainly by market gains. The company reaffirmed its 2026 targets of at least £300 million in adjusted operating profit and approximately £300 million in net capital generation.
• Interactive investor continued to perform strongly, generating £2.5 billion of third-quarter net inflows and reaching 533,000 customers and £112 billion in assets. This growth helped offset persistent outflows in the Adviser division, where third-quarter net outflows remained at £0.7 billion.
• Investment flows favored fixed income, real assets and alternatives, while equities recorded £1.9 billion of outflows. abrdn’s sale of half its Standard Life stake raised about £430 million, with debt reduction identified as the priority use of proceeds.

abrdn LON: ABDN said assets under management and administration rose 4% year to date to £579 billion at the end of September, supported primarily by positive market movements, as growth at its interactive investor platform continued to offset pressure in its Adviser business.

Chief Executive Officer Jason Windsor said the group remained focused on executing its strategy and simplifying its operations. The company reiterated its full-year 2026 targets for adjusted operating profit of at least £300 million and net capital generation of about £300 million.

Interactive investor posts continued growth

Interactive investor, or ii, recorded £2.5 billion of net inflows during the third quarter, up 32% from a year earlier. Net inflows for the first nine months reached £9.3 billion, a 58% increase from the prior-year period.

Total ii customers rose 8% year over year to 533,000, while SIPP customers increased 34% to 131,000. Assets under management and administration reached £112 billion, up 19% year to date, reflecting record nine-month flows and favorable markets.

Daily average retail trades were 28,000 in the quarter, 6% above the year-earlier level. Customer cash balances stood at £8.3 billion, equivalent to about 7.5% of assets, according to Chief Financial Officer Siobhan Boylan.

Boylan said customers have been holding more gilts because of interest-rate conditions, while cash balances had been higher in the first half as investors took time to deploy money into assets. Windsor said ii had reset pricing earlier in the year and did not expect a near-term change to its pricing structure, adding that asset growth was generating operating leverage.

The group also highlighted the full launches of ii Advice, the ii360 advanced trading platform and an enhanced Premium Service.

Adviser outflows remain a challenge

In the Adviser division, third-quarter net outflows were £0.7 billion, unchanged from the second quarter and slightly weaker than a year earlier. Adviser assets under management and administration nevertheless rose 5% year to date to £85 billion because of market gains.

Management said progress toward positive net flows was taking longer than previously anticipated. However, gross flows into its Wrap platform reached £4.1 billion year to date, the highest level in five years. Windsor described Wrap as the business’s critical go-to-market proposition.

The company also reported continued inflows into its managed portfolio service business and said its Aberdeen SIPP, launched in December 2025, had accumulated nearly £1.5 billion in assets. It completed the insourcing of customer-service teams in July, which Boylan said has given the business greater control over the end-to-end customer experience and supported improvement in customer satisfaction metrics.

Windsor said elevated redemptions, particularly at the Elevate platform, remained an issue. He said the company had adjusted its commercial approach, installed a new sales team and was seeing signs of progress, but did not provide a timetable for the division’s return to positive net flows.

Investment flows favor fixed income, real assets and alternatives

Within the Institutional & Retail Wealth segment, investments recorded net inflows excluding liquidity of £1 billion in the quarter, compared with £0.2 billion a year earlier. Fixed income attracted £0.9 billion of net inflows, real assets brought in £1.1 billion and alternatives received £0.8 billion.

Real-assets flows included investments connected to the group’s partnership with Border to Coast and rail-infrastructure projects. Alternatives flows were mainly driven by commodity exchange-traded funds.

Equities remained a drag, with net outflows of £1.9 billion in the quarter. Management attributed part of the outflows to asset allocation and performance, though it said emerging-market and global emerging-market income strategies had shown improved momentum. Windsor said investment performance had broadly continued the improvement reported at the half year, while Boylan said the three-year equities track record was stable.

Insurance Partners recorded £2.5 billion of net outflows, largely tied to Standard Life’s heritage business in run-off. Investment assets under management were £393 billion, with third-quarter declines driven by outflows and adverse markets. The company said acquisitions of Herald Investment Trust and MFS closed-end funds partly offset those effects.

Standard Life sale supports debt reduction

Earlier in October, abrdn sold half of its Standard Life holding, generating about £430 million. Windsor said the sale reduced what had been a nearly £1 billion concentration in a single company and brought the holding into better balance with the commercial relationship between the businesses. The company retains a stake of just over 5% and said it remains a key asset-management partner to Standard Life.

The company notified bondholders that it intends to redeem £210 million of additional Tier 1 debt at its first call date in December 2026. Boylan said the group remains committed to disciplined capital deployment and sees debt reduction as the first use of the sale proceeds, while investment for growth remains a priority.

Windsor said opportunities in ii would be a priority for capital deployment if available. He added that shareholder distributions could be considered once debt reached a more comfortable level, but said the company was not signaling such a move at present.

Management said it had not seen the level of budget-related customer speculation and redemptions experienced ahead of the previous two U.K. budgets. Windsor said ii had started October well, while noting that market volatility remained elevated.

About abrdn (LON:ABDN)

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