Citi downgrades AJ Bell to ‘neutral’

Citi downgraded AJ Bell to ‘neutral’ from ‘buy’ on Monday, saying it was awaiting "a better entry point".

"We are constructive on AJ Bell’s growth opportunity," it said. "Our AUA estimates are 1-3% above consensus, driven by higher net flows. Yet we have become increasingly concerned about margin risk."

It said the FCA’s Consumer Duty regime has been more disruptive than expected, and that it expects growing pressure for UK platforms to pass on higher interest to their customers.

Citi said it had reviewed risks to cash margins in detail and concluded "that AJ Bell is among the most exposed".

It added that it prefers AJ Bell to sell-rated Hargreaves Lansdown.