Wealth manager Quilter has reported a 25% increase in adjusted profit in 2023 to £167m as Assets Under Management or Administration rose by £7.2bn to £103.4bn.

While the figures showed improvement, IFRS pre-tax profit attributable to shareholder returns fell sharply from £199m to £12m due to business restructuring costs and other costs.

The company said that cost cutting and rising business in key areas had improved its full year figures.

Quilter CEO Steven Levin called the 2023 results a year of “strong delivery.”

He said: “We wrote a higher level of new business and delivered record profitability through higher revenues and 3% lower costs.

“Our Affluent segment is delivering strong growth while our High Net Worth segment is investing in growth which will be realised over the next few years. The structural need to save for retirement combined with our growth plans and focus on operational efficiency, supported by a strong balance sheet, means we are well positioned as market conditions improve.”

Assets under Management and Administration at 31 December 2023 increased by 7% over the year (31 December 2022: £99.6 billion).

Markets improved towards the end of 2023 and there was a “modest contribution from net flows,” he said.

Core business net inflows were down to £832m (2022: £2.122bn) with strong inflows into the Quilter channel but with net outflows in the IFA channel, reflecting “challenging market conditions,” the company said.

Adjusted profit before tax was up 25% to £167 million (2022: £134 million) with revenue up 3% to £625 million (2022: £606 million).

Substantial cost cutting helped improve the operating margin to 27% (2022: 22%).

The Quilter restricted adviser headcount was down by 1% on December 2022 levels but the firm has plans to increase adviser headcount from this year, it said.

IFRS profit after tax attributable to shareholders was down to £42 million (2022: £175 million). The company said the year-on-year fall was mostly due to market valuation changes in the policyholder tax charge.

IFRS pre-tax profit, a key measure of profitability, fell from £199m to £12m due in part to “business transformation costs” which are expected to “remain elevated in 2024 and 2025, reflecting spend on anticipated change programmes, but are expected to reduce substantially thereafter.”

In the Quilter channel, the firm achieved a 16% increase in gross flows to £513 million (2022: £443 million) in the High Net Worth segment, and a 12% increase to £3.6 billion (2022: £3.2 billion) in its Affluent segment. The firm saw net outflows in its Affluent and HNW segments reflecting “higher levels of redemptions.”

In High Net Worth sector, Quilter launched a brand refresh in November to “reinvigorate” market awareness of its Quilter Cheviot proposition and to bring all the Financial Planning business under the Quilter Cheviot brand. It plans to grow its client facing professional headcount (investment managers and Financial Planners) to more than 300 over time through developing existing staff and external recruitment. It will also consider “modest bolt-on acquisitions” to bolster its advice business.

Total new business flow from IFAs onto its Platform were up 7% year-on-year despite lower market volumes overall. Platform administration fees to clients were reduced. In terms of cash interest held on its platforms the firm said it would continue to pass on the “majority” of this benefit onto clients.

In terms of the Consumer Duty, Quilter said its “unbundled pricing approach” was aligned with Consumer Duty principles.