Good. We have the presentation up on the screen. Yes, thank you for joining us everyone today. We're here to hear from Tatton with their interim results, which were announced yesterday. In case you haven't seen it already, we did publish a note which actually went out this morning with our latest views on the business. For now, the management team will take us through the presentation, and then at the end, there'll be the opportunity for Q&A. Please, pop your questions through as we rattle through the presentation. We'll take them at the end. Otherwise, over to you, Paul Hogarth.
Hannah, just from a logistical point of view, you're controlling the slides?
I am, yes.
As always.
You're very far down the end of the table, but we can sort of see.
Do you want me, Let's see if we can change the view.
We can certainly hear you, which is the important bit.
How is that coming? Is that better?
That's. Keep zooming.
Keep going?
It depends on your perspective, doesn't it?
How's that now?
There we go. I'd stop there.
Stop there, right. Good. Okay. Very good. Thank you, Hannah. If I could just move to slide five, please. Just a brief introduction to the team. Obviously myself, Paul Hogarth, Chief Exec. On my left, I've got Paul Edwards, our Chief Financial Officer, and on my right, Lothar Mentel, our Chief Investment Officer and CEO of the Tatton Investment Management business. Just a quick review on slide six of our divisional structure just for the new people on the list. Obviously got two divisions, the investment management piece, which is the Tatton DFM MPS service, which is growing nicely and has grown obviously over the last 10 years. We've got our 10th anniversary in January 2023. Competitively priced at 15 basis points, and working in line with all of the IFAs within the U.K IFA wealth management arena.
On the right-hand side, you've got the IFA support services business, which is basically Paradigm Consulting, which is the IFA support services bit, and Paradigm Mortgages, which is our mortgage club. All of the membership in there are directly authorized, so we have no responsibility for their errors and omissions, and we consult with them to keep them on the right side of the track with regards to regulation. More on that later. If we could move over to slide seven, please, which is slide eight, which is the key highlights. Obviously, really, really pleased with the last six months. It's amazing really, what we've achieved in what are very difficult circumstances. Our flows are record-breaking.
We've been actually growing at GBP 150 million a month, so GBP 907 million of new money, which is fantastic. Also, we've done really well on the mortgage side as well with record number of completions. That's reflected obviously an increase in revenue and profitability, which we're delighted with, and the progressive interim dividend announcements of 4.5P payable in December 16th, up 12.5%. Our key metric is very much about the AUM, and we've added in the AUI, and the AUI is for the 50% purchase of the 8AM asset management business that we've concluded. Now, or as at the end of September, we're at GBP 12.3 billion, which we're obviously delighted with.
I'm happy to say that those flows, positive flow rates, have continued as well into October and November. If we do look at the number now, we're actually sitting at GBP 12.9 billion. So, you know, an exemplary set of numbers. If we can move on to operational on slide nine. W e can see that not only have we got those great organic flows, but we're actually seeing flows coming from one of our newest strategic partnership arrangements with Fintel, which is just coming up to its first anniversary. We've got GBP 300 million from the Fintel firms, you know, from a standing start, which, you know, we're very, very pleased with. Further increased IFA engagement. I think that comes down to the fact that the MPS world is just growing it with maturity.
If you look at any of the other asset management businesses, the only place that they're growing is MPS. Of course, with us being the market leader there, you know, we're getting our fair share of the spoils. We've probably got about 13.9% of the DFM MPS market, and we'd obviously want to at least maintain that and grow that if we can. Actually, we've got over 806 IFA firms supporting us on a weekly, monthly basis. That's up 14.7% and reflected in the number of accounts which now stand at over 100,000 accounts. You can do the math to work out roughly where we sit.
You know, it's around about GBP 130,000 per account that we have, showing that we're bringing DFM to the masses really. Very much the quest that we set out to do, you know, is coming to pass. Happy to say, as I say, that the mortgage business and Paradigm Consulting have done their share as well, maintaining their position and having those record completions, which give us this stunning 6 months performance. We'll have a good look outlook at the mortgage market because obviously we don't expect that market to actually continue at that kind of level. It's likely to come off. We'll talk about that shortly, so you can see what our thoughts are on that.
It's only sort of 10% of our total revenue, we certainly don't expect any sort of real changes to our numbers, and it won't push us away from our numbers that we've been forecasting. That's, as I say, good report. We move on to slide 10. Basically our little bragging slide. You know, what we're showing there that despite all the chaos from March 2020, and my goodness, there's been plenty of that, you know, we've grown our AUM from GBP 7 billion to GBP 12.9 billion in 2.5 years. Testament to the model, testament to the business, a testament to the consistent investment returns that we have, and also a testament to, you know, the way the MPS world has matured.
I'll pass you over now to Paul, who will take you through the numbers in greater detail.
Good morning, everybody. The last six months have been really tough market, I think for most businesses, but more specifically in the wealth management sector. You know, everything in life is relative, and so consequently, you know, we're delighted to see our revenue grow by 15%. Clearly supported by increasing AUM over that period, and specifically those record flows Paul referred to in the highlights of GBP 907 million. You know, in typical wealth management sector or fund management sector, you'll have seen, you know, businesses be affected by both, you know, redemptions, but also negative markets as well. We can't necessarily escape negative markets, but our flows have been very strong. Add to that the record mortgage completions as well, you know, that's what's been driving it, that top line.
Obviously, we're in an inflationary environment. We're also delighted to see our adjusted operating profit increase at the same rate and maintain our margin at over that 50%, which is a number that we're looking to maintain as we look forward as well. We're confident in that. We've got our normal standard adjusting items of share-based payments, amortizations or non-cash amortization, and the exceptional items which relate to the acquisition of 8AM just before the interim period end. What I'd probably sort of highlight there is the adjusted fully valued earnings per share. That's up just under 13%.
The first 50% of the acquisition cost of 8AM was a placing of 1.1 million shares, that's why the growth rate is slightly lower than the adjusted operating profit. As Paul said earlier, you know, we've just declared a dividend of 4.5p. You go back over the last 5 years, we've consistently grown our dividend in the same rates as the growth of the company. We pay 70% of our earnings as dividend, and we split that on one-third, two-third basis. We expect that to continue. You just go to the next slide, Hannah, please, and just talk about the balance sheet. You know, we've got a really robust balance sheet.
Our asset has been increased just under 15%. The only real change on this balance sheet relates to the acquisition of 8AM. We always mention that we're capital light. You know, we sit between the platform where the technology is, and that's where the technology spend is, you know, with the platforms, and also with the IFAs, and that's where all the client relationships are. Tatton sits in between those two positions in that supply chain, providing its service. Like I say, the only real change is in tangible assets, the GBP 7 billion acquisition price for 8AM and obviously the deferred element that is in non-current liabilities. We've got GBP 21.6 billion of cash on the balance sheet, which is a nice segue into the next slide.
You'll see that 21.6 is generated from cash from operating of GBP 7.3 million, GBP 5 million of dividends paid, which relates to the final dividend of March 2022. Clearly, that will be lower in the second half of the year, about GBP 2.7 million, in relation to that four and a half p dividend. Our normal tax payments on account, the acquisition related cost, and that includes the underwrite of that share issue as well of half a billion. Clearly, that's not going to be there in the second half of the year. You'll see the relatively modest amounts of CapEx. When you look to the second half of the year, you'll see a really strong cash performance from the group.
Moving to the next slide and just, you know, take a little deeper dive into our divisional performance. Tatton's grown really strongly. As I said before, you know, that GBP 907 million of flows is a record. It averages about GBP 150 million a month. You know, you look at the prior year, it was GBP 652 million, where it's typically around, you know, GBP 100 million a month. Even in H2 last year, it was at a very similar level. A significant increase in this first six months. The revenue of Tatton, obviously, as you can see, 17% growth. We also got affected by the negative or the volatile markets and the negative market performance of GBP 905 million in that same period.
It's probably just worth pointing out that, you know, the timing of that was very unfortunate because markets were typically very bad in April, May and June, you know, slightly recovered in July and August, and then also deteriorated again in September. That's clearly within our, you know, first half of our year. If that markets had just been neutral, you'd have added half a million to that top line of revenue, and it's clearly half a million to operating profit, and you're seeing growth north of 20% on margins, north of 61% as well. Paradigm, you know, there's, you know, clearly the growth in revenue and also operating profit, not quite as strong as Tatton, but still, you know, eight and seven and 7.8% is modest but still very good.
Clearly driven by those mortgage completions, and as Paul said, you know, clearly in the second half of the year, we're not anticipating it to be as strong. When you look at the cost base in each of those groups, it's broadly in line with what we anticipated as well. On the next slide, we have a bit of an outlook for you. On the left-hand side of that slide, it kind of reiterates everything I've just talked about on in terms of the first half of the year. As we look at the second half, we're remaining cautiously optimistic. You know, we're looking at GBP 100 million per month or sort of slightly north of that, you know, for Tatton in terms of new flows.
Obviously the, the markets are baked in for H1, but to be honest, have since recovered a little. We've probably got like about GBP 400 million of that markets, of that market deterioration. From a Paradigm perspective, you know, the mortgage market does remain uncertain. That said, there are significant opportunities out there. W e've historically we've grown from new firm growth. There's lots of five-year mortgages that are now coming up back into the market, so there'll be lots of new remortgages and product transfers as well. Our consulting business, which is a compliance business, is obviously robustly consistent and not particularly driven by markets. From an inflationary standpoint, of course, you know, inflation is here to remain, certainly for the second half of this year.
We anticipate, you know, increasing our salary increases probably broadly in line with the prior year. We have a bit of structural cost increase in our ACD cost, but that's relatively modest at about GBP 200,000. What we're actually giving guidance on is keeping our margin broadly to remain strong and just over that 50%, which is what you see this first half of the year.
Thank you, Paul. If we could go to slide 18, that'd be great. Thank you. Looking at the roadmap to growth that we gave to the city, round about 18 months ago now, we said we'd grow from GBP 9 billion to GBP 15 billion. Where we sit as at November 2022, we're now at GBP 12.9 billion or 65% of the target, so well on the way to the GBP 15 billion. I think for us, it says that, you know, we should get there with just pure organic growth that's expected to come through over that period, and that we don't necessarily need the help of any M&A activity to get to the GBP 15 billion mark.
That said, we'll continually look at the marketplace to see if there is any activity which we can add on, but we'll only do that, you know, if we think it's complementary, takes us into a new group of IFAs, and obviously is earnings enhancing as well. I think it's a lovely position to be in that we don't necessarily need to have an M&A activity to get to the GBP 15 billion mark. it's a good slide that we're happy to continue to update. The next slide takes us through the four fundamentals and really now looking to, you know, have a look at the recent set of reports which show the state of the nation with regard to DFM MPS.
The platform report, which was issued in August 2022, calls the DFM MPS the fastest growing segment of the wealth management arena. It's continued to. It's now sitting at GBP 81.4 billion, and we've got 13.9% of that. It is expected to continue to grow at a rate of 25% per annum to GBP 200 billion over the next four years. We genuinely can see that happening, and we would obviously look to maintain our market share, and if at all possible, then look to extend it. I f we were to maintain our market share and it go to GBP 200 billion, then you're obviously looking at GBP 27 billion-GBP 28 billion of AUM in four years' time, which would be fantastic.
You know, we're really pleased with the growing maturity of the MPS world. We've got lots of new entrants in there. We're still competing against the usual cohorts and the usual people. We're very happy with our price at 15 basis points. We see no pressure whatsoever into changing that, to reducing that. We're very happy with that 15 bps. Most people are coming down towards us in price. Some have gone underneath us and are offered at a lower price, but we're not seeing them actually moving forward and being competitive currently in the marketplace, but obviously we'll keep a watchful brief on that. It isn't just about price, it's about long-term consistent investment returns.
You know, we're heading to our 10th anniversary in January next year, and we have delivered consistent long-term investment performance over that period with our portfolios all performing nicely. We never want to shoot the lights out, but we're nice and consistent and steady, and we avoid any of the horror stories that might be out there. Added to the fact that we've got that widest breadth of IFA partnerships as that we've talked about, and we'll come back to later. You know, I think our landscape is pretty strong. You know, when it comes to service, servicing our existing IFAs, we have a very strong culture in service.
It's what we're all about. It's something that, you know, from the top we lead with, you know, as much service support as we can to the IFA sector. We understand them. We champion the IFA sector on a daily basis. I'm very pleased to say that the IFA sector continues to go from strength to strength, despite obviously the headwinds that are out there. All good there. I'll touch on retention shortly. On slide 20, you can see how the assets have grown from GBP 25 billion in DFM MPS in 2017 at the bottom to GBP 81.4 billion now, obviously expected to go to GBP 200 billion over the next four years. We still believe that IFAs love platforms. Platforms have grown from GBP 450 billion to GBP 680 billion.
It's gonna be a higher number than that now with the market recovering to some degree. We expect that to go to roughly GBP 1 trillion over the next four years, four or five years. You can see that that is growing. I think the interesting piece for me there is even with the growth of the DFM MPS, it's only going up by one single percentage digit per annum, roughly. You know, you've gone from 8.5 to 9.7 to 10.1, now to 12. It's still a long, long way to go. Obviously your next question would be, well, where is the rest of the assets sitting? We believe it's in multi-asset, multi-manager, some still sitting in the IFA's own advisory models or their own funds of choice and some in their own discretionary models as well.
There's plenty to go at and, you know, hugely excited about the growth of the sector. The next slide is really just to depict how over the period the flotation has worked for us. When we floated in 2017, all of the support we had for the Tatton investment business was all from Paradigm firms, because obviously that's where we incubated the whole concept and built up the proposition. Then, of course, from 2017 we've been attracting our or allowing other firms who are non-Paradigm firms to utilize the service, and we've been marketing hard to those firms. You can see, that's been very, very successful over the period, where you can see how the AUM now is in favor of the direct firms, which is incredible.
Also, if you look at the number of firms supporting us, if you look to the far right there, you know, the Pac-Man there is really squeezing the Paradigm firms further and further out, which is exactly what we wanted to see. We'll come on onto the next slide, which shows you the saturation or penetration levels that we've got to with both the Paradigm firms and the non ones. This is an old slide which we continually update. We believe that on average, each firm's got roughly GBP 40 million that's addressable on platform. We've got three-quarters of that from the Paradigm firms now because we've worked with them the longest, and we've got a quarter of that from the non-Paradigm firms at GBP 10 million per firm.
a simple bit of arithmetic says if you could reach the same penetration or saturation level with the non-Paradigm firms as you have them with the Paradigm ones, you know, you've got GBP 12.4 billion of AUM that is addressable and could come to us over a period of time if we were to be as successful on the penetration side. Of course, the plan is to continue to build the number of firms supporting us up from the eight or seven that it is currently. Also, you know, with our relationship management team, look to drive the non-Paradigm firms average higher than 10, and that's been going up gradually if you look back at the chart. You know, that's a lovely position to be in.
If we look to slide 23, you know, we're looking at the strategic partnerships and who we're partnering with. We believe that 50%-60% of the IFAs out there partner with the within the top 10 U.K. distributors. you know, As you can see in green, we're partnering with six of those now, which is, you know, pretty strong. The ones in red, we just will never get to work with because they have their own version of Tatton within their operation, so they're fully integrated machines. The amber ones are ones where we can, over time, look to build our relationship and get into true partnering if it's at all possible.
Somebody like True Potential, of course, obviously offer their own services, and so do others, they allow us to at least have a chance to get some business from them. When you look at the strategic partnership arrangement, we've got plenty to go at. We've seen the returns that we've had from both the Paradigm and the Tenet and now the Fintel one over the first 12 months. Of course, the sales teams are working to extend that out actively. We have seven people in the sales team direct. One sales director with six direct reports. I'm happy to say that, you know, they're not running up to capacity. They can still take more leads. Of course, if we were...
If we did want to extend and we saw the right individual, we wouldn't hesitate to add that in. You know, we're very happy with the six that we've got, they've got relationship managers behind them. Also, within Lothar and the team in the city, we have investment specialists that can actually come on and help the BDMs actually convert member firms across, and that works really, really well. On slide 24, you know, we're not resting on our laurels. This MPS world is definitely the place to be, but, you know, we've got to keep evolving it. Not every IFA wants to completely outsource the whole arrangement and their name just disappear completely out of the fund management proposition. We have 3 different segments that are available to those firms.
A firm can have a co-branded Tatton MPS, so we can be co-branded with that particular firm. We've got nine arrangements there. We've got just short of GBP 600 million that's come in from that. That's really good. We're happy to do that. Doesn't cost us anything. It's still at 15 basis points. Costs us very little, if anything, to co-brand, but it gives that IFA a feeling of ownership, if you like, and glue, which maintains the assets even more sticky. You can move on to that to go completely white labeled, where the IFA has its own naming of the portfolios, and we drop out to become the ISL inside. We've got six arrangements like that, and we obviously want more. That's totaling GBP 612 AUM.
We have one where we go a stage further, where the IFA was considering having its own discretionary fund management permissions with the regulator, but thought that was a step too far, actually thought actually it'd be really good if they could join the investment committee. We offer a joint investment committee with us having control. You know, nothing can be purchased within the portfolios without our approval. We keep a watchful brief on that, but at least they feel part of the investment approach. We can bespoke that to some degree for them. That's how we've evolved. Slide 24 shows you the sort of landscape, if you like, and where we are. Sorry, 25. Beg your pardon. Slide 25 shows you the landscape of who we are competing against.
I mentioned earlier that, you know, there are lots of new entrants, but we do seem to be still competing against the names. I'm happy to say the brand's evolved and has grown. You know, we're getting our fair share, and we are invited to tender alongside some of these others, you know, on a regular basis, and we get lots of phone calls coming into the office, new leads for the IFAs. On slide 26, we've shown our attrition rate because IFA consolidation is ongoing. Yeah, we actually lose about 2% of our FUM to IFA consolidation. It's not a big number. It's something we should keep an eye on and watch briefly, if you like. You know, there is a little bit of attrition, but I think there's good things and bad things from IFA consolidation.
I think consolidation actually says to the IFA they're building valuable businesses. For every person that wants to sell, there's a person, you know, an IFA who wants to buy and extend. We're looking to see how we can help them grow because that's our job as an IFA support services business and a champion of the IFA sector. It's not something we're concerned about, but something we, you know, we actually keep an eye on, as I said. Slide 27 shows our strategic direction, which is very much organic, and more organic. Obviously, you know, we're working with more and more strategic partnerships as and when we can. A little bit of M&A if we can find one that suits.
I have to say with the sort of the growth of the MPS sector or the maturity of the MPS sector, people's aspirations are a little bit higher on valuation. We need to keep an eye on that. As I say, mostly organic, and we can potentially do a bit of M&A moving forward. On slide 28, just to cover off Paradigm Consulting and Paradigm Mortgages. Obviously, the last six months have been really strong. We expect Paradigm Consulting just to be steady away with work done on Consumer Duty. If we look at the mortgage division, obviously it is predicted that market will slow. Our MD believes it could slow to the rate of 10%-20%.
As I said earlier, it's 10% of our revenue, so that 10% or 20% drop in the market isn't going to push us away from our forecast. We also believe that mortgage advisors are super resilient, and they're already turning their attention to product transfers. There is a huge fixed rate maturity mountain that's coming over the hill, which people will be working with over the next six-eight months. Obviously then we'll continue to build the number of firms in there to try and counterbalance any downside on the mortgage market. You know, we can't sit here and say that we don't expect it to come off to some degree, we do. As I said, it won't push us off course.
That, I think, takes me nicely over to Lothar to take you through the investment, please.
Thank you very much, Paul. Hello. Yes, my first slide, just to reiterate or refresh our seven U.SPs. We started out 10 years ago with that challenger proposition coming in at an unrivaled 1.15% DFM fee. As we heard from Paul, there's some others moving down there. I n a way, it's still important, but other things have become just as important. Being on 20 platforms, therefore platform agnostic is really important. The non-compete position that we have with advisors is very important for them compared to some of our competitors. We are a pure investment manager. We would never be able to take on a client directly, even if they wanted to.
The breadth of our offering means that they won't have the problem of being accused of sure-horning clients into something that might not be suitable. With the 45 model portfolios that we have on offer, we cover very, very broad, wide base. For example, the ethical portfolio approach is not something that we've just started, when it became fashionable two, three years ago. We've been doing this for seven years in the portfolio space and are therefore probably the longest ones to have done that with the longest track record in the portfolio space. Client protection, well, we adopt the Reliance on Others approach, which means that it's not the IFA who is carrying the risk in signing up the clients as the Agent as Client approach has it.
We have an individual investment management agreement with each and every underlying 100,000 accounts that we have, which obviously is comforting, more comforting for the IFA because it is that classic relationship as you have it in the private banking space. Last but not least, where it isn't the key skill of an IFA business to produce, we call them mail merges or, you know, sending out lots of letters to all their clients if they don't want to continue managing the portfolios themselves, but they appoint us then, we help them with that bulk migration support. Next slide. A quick overview of our overall proposition. On the right-hand side, bottom, obviously very important that the 20 platforms we're on.
Above that, the risk profilers, and being on there, which is so important for the IFAs in order to document the suitability of what they advise their clients on. The model portfolio is there on the left, across five different styles and across six different risk profiles. That's quite a comprehensive matrix there. If that isn't enough, then we can also offer a sort of bespoke service, so particularly for clients who have for historical reason, cherished holdings or need a specific pension drawdown arrangement. We can do that through our MPS based bespoke service. We call that the BPS service. For IHT purposes, the Tatton name portfolio. Next slide, please.
This is how our assets under management spread across all the different categories with the exception we haven't listed here, the BPS and AIM. As you can see, you know, whether it's negative % doesn't mean that that area is shrinking. Everything is growing, but it's just in the relative proportion of the overall 100%, it may be going down. We can see that the tracker and the hybrid of tracker and active are still the strongest growing, which is interesting really because the actively stock selecting funds have had a major comeback this year in the market as we've seen that massive rotation out of growth more towards core and value.
Therefore, I think that's still a bit of remnant from the previous, more momentum-driven, fund performance, era. We're also seeing good growth still in Ethical, but that's come back, come down. Might be, and may well be driven by there just being, less of a performance advantage because let's face it, Ethical is a restricted investment universe which, very much is, has got a growth tilt, even though we've diversified that as much as we can. But the performance therefore this year there will have been lagging when it was massively ahead in the years before. Then last but not least, our Tatton Global that we introduced in 2020 is also picking up a fair share now. It was right to have launched that.
It does have a following in the U.K. with investors who want to be more globally focused rather than having the traditional sort of 30% of their equity exposure still in the U.K. Next slide. On the performance side, our five years there, the table and on the right-hand side, we've just depicted the Tatton Core, which shows exactly where we want to be performance-wise, i.e., there or thereabouts, where our peer group is just sort of a smidgen better, recovering more of the cost that retail investors obviously incur through the whole value chain. We've got that one outlier there at the top, which normally we wouldn't like so much to have such an outlier, that's simply because our global equity portfolio is driven by a global cap-weighted allocation.
As I mentioned earlier, that only has 4% in the U.K. With the U.S having been so strong over recent years, that's obviously produced a stronger performance than the average classic peer group in the U.K. On the next slide we have got the three years, and there we're showing the whole range of the Tatton Ethical, and you can see that it's really carrying through in here with the global asset allocation. Again, we are very happy with where we are relative to our peers, if you look at the table. The same is also true, I haven't got it on here, but somebody mentioned yesterday, what about one year? The one year also looks really strong. The only one that we have slightly underperformed the ARC is there.
It's the defensive area because we didn't hold quite as much cash as some of our competitors may have. That's something to recover and we're in the process of. On the next slide, we are showing the communication is increasingly important and very much appreciated by advisors and clients alike. We're very much reacting to that and producing a video, educational or market update video more or less every week. That's really been a very strong addition to our communication which otherwise centers around the Tatton Weekly that goes out every Friday.
Of late, obviously the ethical has been particularly important because there was so much debate and discussion in the press and therefore, it's very, very close to our heart to make sure that investors who come in on our ethical portfolio do understand what you can, but also what you cannot promise from this sort of exposure and doing that very much through the communication. On the next slide, we don't tend to talk very much about the IT that we have got internally, but increasingly it is creating quite a strong additional proposition to our investment proposition in that it makes it really a lot easier for the advisor to sign up clients that are on any of the 20 platforms, and then seeing them in a consolidated view through our portal.
Also, signing up new clients by generating very personalized investment proposals, which are usually only something that you would get in a bespoke or private client, private banking arrangement. That's proven really, really valuable and also very safe. I mean, we have invested massive amounts of effort into making it as safe as possible from a cybersecurity point of view. With two-factor authentication being the must, I'm feeling quite comfortable that we've done what's the top end of IT ability.
Thank you, Lutz. The final slide is just our summary slide, which we've been through. I think, Hannah, we're probably ready for questions?
Thank you. Let's have a look. Right. What was the reason for the drop in Paradigm firms from the peak of 182 in September 2020 to 168 now?
It's just a little bit of consolidation, I think. You know, you've seen, you know, some firms retire, some have been consolidated. Nothing wrong with that.
What share of the overall platform market do you think MPS could reach? Is there a natural cap?
I don't think there's a natural cap as such. You know, as I say, we expect, I think we're happy with the forecast that they are saying we get to over the next four years of going to GBP 200 billion. That would probably be about 25% of the amount. You know, there's no reason why that couldn't continue from there. Obviously it's hard to look further out than four years.
Thank you. Have you thought about offering your portfolios to fintech D2C companies which service consumers directly? If not, might this be a future growth path to a younger client base?
That's a very good question. No, I mean, to be fair, we're very happy with being distribution our products or our service operation from and to the IFA sector. If you look at everything we do, we're very IFA centric. You know, we have no thought to go direct to consumer. It's all B2B for us.
What about your efforts to attract a younger client base?
Yeah. Really that's a job for the IFAs. The IFAs are the ones who've got to make sure that they attract the younger members of the family. You know, if you look at the average age of the IFA, it's roughly 56, and if you look at the average age of their clients, funnily enough, it's 56. You know, they know that they have to improve and get to know the children who are moving forward into that space. It's something that they are doing. Lots of IFA businesses are bringing their own family in to work within the practice because of the consolidation valuations that are there.
Again, those will be working with the younger generation moving forward, and I think post-COVID, you know, a lot of the IFAs are working pretty well digitally these days and have extended their footprint on the back of that. They're not just stuck looking after people in their own area. They can go out of area now. They will definitely looking to engage with them, with the next gen.
Thank you. Our research has forecasted drop in second half revenues compared to last year. Does your thinking align with this?
I think that just reflects the markets effectively. I think what we're also saying was, first of all, we're seeing a certain market recovery, and but we're cautiously optimistic is things what we're making.
Thank you. As ever, are you seeing any pressure on your pricing power? Obviously that nice graph you showed, put you, way ahead in terms of assets and the lowest on price. Are you seeing any to stay ahead of the crowd?
We're not seeing any pressure on price whatsoever. You know, we obviously ask ourselves all the time, "Is the price right? If we drop the price, would we get more?" We don't think we would. We think price at 15 basis points is the industry price that everybody will settle towards. There will always be an outlier either up or down, but it's not something we are concerned about, and we're very, very happy maintaining the 15 basis points.
Thank you. Can you give an update on the current growth trajectory of the Fintel and Tenet deals?
Yeah, of course. On the, on the Tenet deals, obviously growing, back a longer period, we're now in excess of GBP 1 billion. I think we guided the market that we do GBP 1.2 billion-GBP 1.5 billion. We should easily do that and extend as we work with more and more of the Tenet firms. With Fintel, you know, I think we could be looking in time to get to GBP 1.5 billion maybe over the next three-four years. We're already at GBP 300 million, you know, again, lots and lots of firms to go at there. I think I'm happy with those numbers that we've given.
Acquisition prices. There's more competition out there to acquire assets, operational leverage. Given your attractive margins, is there an argument for increasing your land grab at this stage?
That's again a very, very good question. I think, you know, we are on a land grab, so we're pushing hard to get as much new business organically as we can. Everybody's incentivized and pushing and pulling in the same direction. When you look at the maturity of the MPS world, as we've said, that naturally pushes up people's expectations of valuations. We did lose a potential M&A target to another party recently because they were prepared to pay more than we were. Unfortunately, you get a push and pull, don't you? As things mature and the market grows as strong as it does, then people's expectations grow higher and therefore pricing goes higher. Therefore we, as I said earlier, we don't need to do M&A.
We'll only do it when we see that it fits and we can buy it at the right price.
Leading on, can you explain the rationale and potential of the 8AM acquisition?
Yeah. The rationale first. The rationale of the 8AM one was we knew, they were a team that we knew, so we've known them for some time. But it's a different way of managing the portfolios. It's very quant or AI driven. It takes us into a whole new breed of our different IFA sector. It's complementary. It's at the same price as us, we can see that it's attractive from that point of view. All in all, we quite like the structure of the deal, the fact that it was 50%, it wasn't much of a risk proposition. We're not integrating it currently. We're just leaving it sitting as an outlier. We'll look to integrate later, probably when we buy the second half when we get to that level.
It's got an earn-out proposition as well, so they've got to perform, you know, to reach the earn-out proposition. We're very, very pleased with it to date. We expected, and I think we guided to, you know, getting GBP 800 million. We're up to GBP 1 billion now. We look to see and help them move their flows forward and utilize, you know, some of the HQ stuff that we can give to them, such as the portal as Lothar's been through, and any support we can give them to help them grow faster.
What is the main glue in your IFA relationships?
I don't think there is one main glue. I think it's a number of things. I call it four planks, really. I think obviously price, the consistency of the investment returns, that's so vital. How you service and how you communicate with those IFAs. I've put the four together. We really do understand what they want, and we have a tremendous culture within the business to support the IFA and service the IFA. You know, which goes back to one of the previous questions, you know, have you considered going direct to consumer? You know, we do understand where we sit. I don't think anybody serves the IFA community better than we do.
As I say, the culture is, you know, from the top right the way down, that when an IFA comes on board and they want us to jump, we usually say how high, would be the concept there.
Good way to treat your clients.
Yeah.
what keeps you awake at night?
Not a lot these days, to be fair. I'm always tired. No, literally, there's nothing that we're concerned about. It's a, it's obviously a solid question. It's one that I would ask myself. No, there's nothing that keeps us awake at night. I think for us, it's all about execution of the plan. It's about where we can take it. We can see that we are very fortunately in the right place in this super growing marketplace, and, you know, we just need to maintain that and move that forward and we obviously enjoy doing what we're doing. No, I have nothing that stops me sleeping at night.
Good. Well, that's it from the questions. You know, I think your performance could argue as being super heroic. I'm sure that's what you were referencing with the picture behind you. A few comments on that as well. I think I would appreciate that. Thank you all for that presentation, and we look forward to hearing from you in six months' time.
Thank you, Hannah. Thank you. Thank you, everybody. Thank you, everybody. Thanks a lot. All the best. Yeah. Bye-bye. Thank you. Bye-bye.