Financial services provider AJ Bell today posted record interim profits as revenues topped £20m for the first time.

AJ Bell, which is based on Chester Road, Manchester, announced pre-tax earnings of £9.29m for the six months to March 31, up 24 per cent from £7.49m, and an 18 per cent hike in revenues from £17.01m to £20.04m.

Profits would have been even higher but for £428,000 paid as part of an industry-wide levy to the Financial Services Compensation Scheme to cover losses suffered by clients of certain investment fund managers.

Andy Bell, chief executive of AJ Bell, said the firm decided to bear the cost rather than pass it on to clients.

AJ Bell administers self-invested personal pensions – or SIPPs – and has added individual savings accounts and share-dealing accounts to its products in its first moves into the wider retail savings and investments market.

The number of SIPPs administered by the group rose 24 per cent from 44,668 to 55,498 in the first half of the financial year. Total assets under administration surged 20 per cent from £12.6bn to £15.1bn.

The SIPP market accounted for virtually all of the growth, rising from £9.3bn to £10.6bn.

More people switched from having their pensions tied up with insurance providers to administering them independently or through advisers.

AJ Bell also benefited from people transferring chunks of other pension pots into their SIPPs, and from the acquisition of a book of SIPPs from TD Waterhouse, which it is administering under a white-label arrangement.

Assets held for institutional stockbroking clients were flat at £4.5bn. AJ Bell has seen staff numbers rise from 333 at the start of the financial year to nearly 400 as it expands its range of services and client base.

The group derives much of its income from set-up and annual administration fees, transaction charges and commission on share dealing.

The interim dividend is held at 8p. In a joint statement, chairman Jim Martin and Mr Bell hailed record interim results and said: “The outlook for the remainder of the year is very positive.”

The group is to focus on further products and increased marketing activity and, looking ahead, expects to see growth in its SIPP business after the government relaxed the rules to allow higher tax rate relief on contributions of £50,000 from April 6.

AJ Bell has also made a series of management changes.

Chief financial officer Stuart Dootson has stepped down and has been replaced by Michael Summersgill. Richard Taylor becomes chief operating officer while commercial director Fergus Lyons takes responsibility for sales and marketing.

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