Abrdn calls in robo-investing pioneer to stem £5billion customer exodus

ABRDN, the venerable life insurer, has entered the world of AI-driven wealth management with the purchase of robo-investor Exo in its latest attempt to stem a four-year customer exodus.

The UK’s second biggest asset manager, founded in 1825 and formerly known as Standard Life Aberdeen, said the acquisition of Exo Investing from London-based Nucoro would give customers access to a “24/7 digital wealth management” app.

The announcement came as Abrdn posted a 52% jump in operating profit to £160 million in its first market update since the much-ridiculed rebrand earlier this year.

The Edinburgh-based group acknowledged it had suffered a further £5.6 billion in net customer outflows in the six months to June 30, but noted this was an improvement on £24.8 billion of outflows during the same period a year ago. Assets under management fell from £535 billion to £532 billion.

New chief executive Stephen Bird, who joined from Citigroup last September to lead a turnaround, expressed confidence the group was edging closer to growth in assets and said much of the outflows were of low margin funds linked to a historic contract with Lloyds, which was terminated three years early in 2018.

“We got very close to growing our assets but what was really important was that margin went up and revenue grew 7%,” he said.

Bird said he was focused on using new technology to drive growth and profitability.

Exo’s app offers artificial intelligence-powered technology which allows customers to build a portfolio built on their appetite for risk, experience and investment expectations.

“Exo was the first of its kind to offer a fully automated wealth management platform, leveraging machine learning to feed into portfolio decision-making,” Bird said.

“There is a downward pressure on fees, changing customer expectations and increasing regulatory requirements. It’s important to address these issues by providing a highly-scalable, next-generation service to investors.”

Abrdn, formed after an £11 billion merger in 2017 between Standard Life and Aberdeen, said pre-tax profit rose to £113 million from a loss of £498 million last year and fee-based revenue grew 7% to £755 million.