JPMorgan reiterates conviction on overweight-rated Aberdeen

(Sharecast News) - JPMorgan Cazenove reiterated its conviction on Aberdeen on Thursday, having recently upgraded the shares to 'overweight' and placed them on 'positive catalyst watch' ahead of the first-half results on 30 July. "In particular, we would like to stress our expectation of a substantial improvement in flows within the Adviser vector, driven by a combination of stronger gross flows and especially lower redemptions," the bank said.

"Aberdeen has in the past mentioned that a large proportion of its outflows were adviser-led as opposed to customer-led (i.e. advisers so dissatisfied that they decided to move their clients' AUM somewhere else).

"We believe that the bar to stop adviser-led outflows is low, as we see this as a solution of last resort for advisers who would rather avoid the complex and time-consuming process of migrating AUM to another platform."

JPM said the substantial price reduction implemented by Aberdeen in the first quarter, paired with an improved customer service, should therefore result in a material reduction in outflows.