Hi, I'm Danni Hewson, financial analyst at AJ Bell. Thank you so much for joining us for our 2022 Annual Results Video. In a moment, we're going to be hearing from Michael Summersgill and Peter Birch, CEO and CFO at AJ Bell. First, let's run through some of the key numbers from the year. Let's start with customers. As reported in our year-end trading update back in October, AJ Bell's total customer numbers increased to over 440,000 at the end of September. This is an increase of 15% over the last 12 months, with the growth being driven by the company's platform business. Assets Under Administration, or AUA, had opened the year at GBP 72.8 billion.
During the year, AJ Bell's platform business delivered strong net inflows of GBP 5.8 billion, with GBP 3.3 billion being advised and GBP 2.5 billion being D2C. Following the planned closure of the institutional stockbroking business, non-platform net outflows were GBP 2 billion. Adverse market movements reduced AUA by a further GBP 7.4 billion, resulting in AUA closing the year down 5% at GBP 69.2 billion. Moving on to the full year financial results announced today. Revenue was up 12% to GBP 163.8 million. This was driven by higher average AUA compared to the previous year and a slight increase in revenue margin to 22.6 basis points.
The uptick in revenue margin was largely due to an increase in the average interest rate earned on cash following interest rate rises, particularly in the second half. With interest rates having moved beyond the level expected at the time of our interim results in May, management are now guiding to further improve platform revenue margins in full year '2023. Profit before tax for the year was GBP 58.4 million, up 6% from the GBP 55.1 million reported in 2021. The percentage increase in PBT was lower than revenue growth due to the investment in new simplified propositions, Dodl and Touch. The PBT margin was 35.6%, which was slightly ahead of the guidance provided at the half year due to stronger than expected revenue margins in the second half.
An improvement in both revenue and profit margins is anticipated next year, with management guiding to an improvement in PBT margin of around two percentage points in FY 2023. In line with the increase in profit before tax, diluted earnings per share increased 6% in the year to GBP 0.1135 per share. Let's end with dividends. The board has proposed a final dividend of GBP 0.0459 per share. This takes the total ordinary dividend for the year to GBP 0.0737, representing a 65% payout in line with the company's stated dividend policy. You can find full details about these results on our website. Now let's hear from Michael and Peter to get insights into what they think is behind the numbers, and also their thoughts on FY 2023 and beyond.
FY 2022 has been a good year for AJ Bell. Strong growth in the platform business in what I think everybody would accept has been a pretty tough set of market conditions. The platform business has continued to grow well, so we've seen that in both in terms of customer numbers and the assets attracted to the platform. Customer numbers have grown about 16% over the course of the year, and it's been a similar rate of growth on both the advised and the D2C side of the business. Inflows have been strong as well, and that's been particularly the case in the advised market, that has proven to be very resilient in these market conditions. There've been a number of changes in the senior management team over the course of the year.
The most significant is obviously Andy stepping down as CEO. I think the way that we've done that as a business probably says a lot about Andy. You know, what Andy's achieved here has been incredible in the time that he's been the CEO of the business. Through this transition, for him, it wasn't about him stepping down, it was about me taking over and the way that he supported me through that and helped me and the rest of the team focus on what comes next. I've been here for a number of years, and the way that that succession has been executed, it's given me the chance to build a team around me.
I think we've got a great business model and a great team and I'm looking forward to the challenge ahead. Service is something that we always take very seriously at AJ Bell, FY 2022 has been a strong year on that front, no doubt about it. All the measures of service that we have, from how quickly we answer the phone to the feedback that we get from customers have all been up around sort of the all-time highs that I've seen in the business. The customer retention rate is the ultimate test there. That's up in the year and well over 95% now. It's been a really strong year for AJ Bell Investments.
It's a still quite a small part of the business, but a very important one, and one that's growing really quickly now. In the year, we've seen GBP 1 billion of new money attracted into our investment solutions. The performance of all of the investment solutions has been terrific. We're getting up around the GBP 3 billion mark now. You can see that the scale of the business is coming there and it'll be a bigger part of the business in years to come.
Financials have also, you know, reflected that strong performance. Revenue and profits, they're both up in the year. You know, the revenue model of the business is well diversified, and that's a real strength. It enables us to deliver strong performance in different market conditions. In the previous year, we had a lot of dealing activity which drove transaction revenue. That settled down a bit more this year as, you know, the market conditions there have been a bit harder. At the same time, we've had rising interest rates and that has, you know, flowed through into an overall higher revenue margin, whilst at the same time, you know, reducing some of our charges to customers.
So yeah, pleasing set of results, with both revenue and profits up.
There are some challenges in the platform market. At present, there are some short-term headwinds for sure, that's true in so many parts of the economy. The way that that's impacting the platform market is lower investor confidence, markets have also been very volatile as well. I think the thing to remember about the platform market in an environment like this is that although confidence of retail investors is low, you might not think that people are opening new accounts and contributing new money into those accounts, there's a lot of money already in the financial system that is well served on platforms. If the GBP 3 trillion total available market, total addressable market for us, GBP 2 trillion of that is not on platforms at present, people can consolidate those assets on platforms.
That gives me confidence that we will, even in this challenging market, be able to carry on growing the business. There are short-term challenges, but I think that we're well positioned to deal with them. First and foremost, we have a trusted brand, and we're a scale player, so if investor confidence is low, you know, I think the people will gravitate towards the trusted and established players in the market. I think you need to have scale to be able to continue investing in the business and offer sharp pricing to customers, and we're in a position where we can do that. I think there are factors about our business model that mean that we're particularly well positioned as well.
The fact that we're in both the advised and the D2C parts of the platform industry means that we've got the best growth potential in what could be a challenging market. Our revenue model as well, you know, we're not overly dependent on any one revenue line, and that means that we know that the financial performance is gonna be at a certain level in a wide range of scenarios. I think we should prove to be a resilient business in this market. I'm excited about the long-term opportunity in the platform market. It's a market that benefits from structural growth drivers, and the key one for me is demographics.
You know, people are living for longer, they're working for longer to save for their retirement. That means that the need for services like ours are greater. There's a long list of those structural growth drivers, technology, legislation, the list goes on. It's a market that's very attractive as we sit here today, but should carry on growing for many years to come. I think we're well-placed in that market, but what I want to make sure that I do and the rest of the management team here focus on is investing in the business, thinking about where we need to be in three years' time, in five years' time, making sure we carry on investing in those aspects of the business now so that we're best placed to take that long-term opportunity.
The way that we were going to approach the platform market going forward is to have the full service propositions that we've always had, so Investcentre in the advised market and AJ Bell in the DTC market. They will carry on being the growth engine of the business for years to come, we will carry on investing in them to make sure that they stay at the forefront of the market. We're also investing in simplified platforms and bringing those propositions to markets. We've launched Dodl in the year, we're gonna carry on developing that proposition and adding new features. We're still in the build phase of Touch on the advised side of the business. That is an area of ongoing investment.
By introducing those simplified propositions and having those four platform products going forward, the aim is to increase our footprint and appeal to as broad a range of customers as possible.
The cost of the business are broadly in line with what we set out at the beginning of the year in terms of our expectation. There are two aspects to our costs. We've got the cost that we're investing in the future growth of the business, and then we've got our sort of BAU costs of running the business. If you look at our technology costs and distribution costs combined, you know, those are up 29%, and that's because we're investing in the future growth through our simplified propositions and, you know, developing them and marketing them. Whereas our underlying operational support costs, you know, they're only up 8%. The reason for that is we've got those under control. They're tightly controlled, and we're delivering some operational gearing there.
The impact on overall profit is that both profit and profit margin, you know, ahead of the expectation that we set at the beginning of the year, and that's, you know, that's a really pleasing outcome for us.
Pricing is something we've always had a keen focus on. As we grow the business and we scale the business effectively, we should be able to carry on reducing prices to customers and still increase returns to shareholders. That's something that's in the DNA of the business, we've taken the opportunity to do that this year. We've reduced charges to customers by about GBP 5 million on an annualized basis over the course of FY 2022. It's the kind of thing as we carry on growing, we want to make sure that we retain that focus and we share the benefit of our growth with customers going forward. If we're gonna maximize the growth opportunity in the platform market, we need to have a stronger brand awareness than we do.
There's a few things that we're doing there to try and strengthen it. Yes, we've looked at new sponsorship arrangements and that, and there's more brand advertising going on. We're also trying to really funnel that as effectively as possible in the D2C platform space. We've dropped the invest sub-brand that we've carried for a number of years there, and our full service proposition will simply be called AJ Bell going forward. As we increase the brand awareness and we simplify that journey for a potential new customer, hopefully it maximizes our growth potential.
I think there's lots of benefits to us investing in the brand. It should mean that we bring more customers onto the platform. It makes it easier for us to do that. More customers with more assets means a business that's got greater scale. You combine that with the operational gearing of the business, and we've got a business that makes more profit. You know, we can reinvest that profit. We can reinvest it in pricing that customers pay. We can reinvest it in our people or our propositions. The other benefits of having a great brand are that, you know, our people really like working for a business that's well-known and has a positive brand. That helps us with recruitment and with retention.
You wrap all of those things up, and you get a business that's generating better returns for shareholders. I think, yeah, everyone benefits from the, from the investment that we're making, and I'm pretty excited about how that's gonna play out.
It's been an important year for focusing on the pay and benefits that our workforce receive. Every business has had to do that as a result of the inflationary environment and it's something that we gave a lot of thought to here. We wanted to make sure that we gave people the right level of salary increase, but also that we focus wide of that and put things in place that reinforce the very positive culture that I think we've got at AJ Bell. The bit that was particularly close to my heart was the new share scheme, as we've always had a culture of share ownership here. It was something I wanted to make sure that became a meaningful and permanent part of everybody's pay.
For everybody outside the senior management team, now they'll receive GBP 2,000 a year of AJ Bell shares, and obviously as those people stay with us long-term, build and develop their careers with us, that should become a very meaningful part of their of their overall package.
As we're investing for the future, we will make decisions around certain areas of cost that we will invest in. We will also make sure we keep our costs under control. We'll be quite careful where we make those investments around things like our simplified propositions and our brand, but other costs we will keep under control. You will see the benefits of a highly profitable, highly cash generative business come through over the foreseeable future, and we're confident that we can make those investments while at the same time growing both profits and profit margins.
In the DTC market, it probably splits into two categories. The first-time investors, the less sophisticated investors, the target market for Dodl, there has been an impact there. You know, it's been difficult for people to add more money to platform. That's been a difficult and challenging market to grow that proposition in. It's a fantastic proposition and one that I think will have a great future. The full service platform on the DTC side, AJ Bell, there, the customers have been able to carry on investing. There has been a reduction year-on-year, certainly. The average customer's added about GBP 10,000 to the platform, compared to GBP 13,000 last year. And that is the inflationary impact on those households.
In the advised market, it's been quite a resilient customer base over the course of the year. These are generally people who are higher earners and have more accumulated wealth. There, it's not that people are immune to inflation, clearly. There has been a reduction year- on- year, but it's been less significant than on the DTC side. In the advised market, your average customer's added about GBP 14,000 to the platform, compared to GBP 15,000 in the prior year. Nobody's untouched by inflation, but you can see there the different extents to which our customers have been impacted. DTC customer behavior has changed in the year, but some of the long-term characteristics haven't.
People are still using tax-wrapped accounts, you know, and it's that long-term investing, long-term buy and hold mentality that we're really trying to appeal to and design products for. Customer activity has dropped in the year, so trading activity has been lower. That makes perfect sense to me. I think in an uncertain time like this with market volatility as heightened as it has been and market correction that we've seen, it makes sense that people are just a little bit more cautious about buying and selling assets on the platform. It's not something that's a concern to us as a business. It's very normal behavior. I would expect over time for people to start trading a little bit more and return to those long-term averages that we're used to.
I think FY 2023 will be a good year for AJ Bell from a financial performance perspective. You know, we've updated our guidance in terms of the revenue margin that we'll generate, and that's been driven by a higher interest rate environment. You know, we're keen to make sure that we use that position to be able to deliver to all of our individual stakeholder groups. From a customer perspective, you know, we'll be investing in our propositions and also looking at our pricing. From a people perspective, we're making investments into our remuneration, and Michael talked previously about the free share scheme that we've put in place for our people, which should have long-term benefits for the business.
Clearly we've got our shareholders, and we're fully expecting that our levels of profitability and our profit margins will also increase through FY 2023. All in all, you know, pretty confident that we can use our strong financial position and the diversified nature of our revenue streams, to deliver really well to all of our stakeholders.
I'm excited about the long-term future for the business. I know that there are short-term headwinds. I'm not blind to that, but I'm looking through to that period. I think we've got the right business model to succeed in the platform market long- term. I think that combination of being in both the advised and the DTC market and setting ourselves up to have full service and simplified propositions really does maximize the growth opportunity for the business. I think the fact that we operate on a single tech stack means that we'll scale effectively. I think I've got a great management team, and I think there's a good culture and a great workforce here at AJ Bell.
I'm looking forward to working with all the people in the business to drive the business forward for many years to come.