A strong half with one soft spot

Tatton Asset Management, the Wilmslow-based Investment manager that builds model portfolios for independent financial advisers and runs the Paradigm adviser support business, reported a 15.5% rise in Assets under management and influence to £27.968bn in its trading update of 14 October 2026. (LSE:TAM) Yet one measure, monthly net inflows, came in below the group's own guidance range. With interim results due on 10 November 2026, that gap is likely to be a focus.

Tatton's core proposition is managed portfolio services, through which advisers place client money into ready-made model portfolios run by Tatton on investment platforms. (LSE:TAM) Revenue is linked mainly to the value of assets managed, which is why both flows and market movements feed directly into earnings.

What the numbers show

Core assets under management rose 15.0% to £26.224bn in the six months to 30 September 2026, from £22.805bn at 31 March. (LSE:TAM) Of the £3.419bn increase, market and investment performance contributed £2.415bn and organic net inflows £1.004bn. Including 8AM Global's assets under influence of £1.744bn, the combined figure reached £27.968bn.

On our calculation, roughly 71% of the half-year AUM growth came from markets rather than new money. (LSE:TAM) Net inflows of £1.004bn compare with £1.352bn in the first half of FY26, a figure that excludes flows linked to the cancelled Perspective Financial Group contract.

The shortfall and the explanation

Average monthly net inflows were £167m, against FY26's average of £234m and below Tatton's guidance range of £200m to £250m a month. The company attributed the shortfall to a rise in consolidation activity in the second quarter above its normal rate. It did not quantify that effect in the update. Management also pointed to adviser and client caution ahead of the Autumn Budget and the usual summer slowdown.

Annualised, the half's flows still represent 8.8% of opening AUM, by the company's calculation. Tatton reiterated guidance of £200m to £250m a month for the second half, citing confidence in the near-term pipeline. That is management guidance, not a result.

Why the flow figure matters

For a platform-style manager, fee revenue tracks assets, so market gains lift income but can reverse. Net inflows are the more controllable driver and the one most closely linked to adviser adoption. Here the evidence is mixed but broadly constructive: the number of supporting IFA firms rose 6.3% to 1,295 from 1,218. On our reading, a widening adviser base alongside softer flows suggests timing and consolidation effects rather than a loss of clients, though only the interim results can test that.

Chief executive Paul Hogarth said the group is close to its target of £30bn by FY29 and expects to reach it early. That ambition remains partly dependent on markets.

Paradigm in brief

Paradigm Mortgages participated in completions of £10.0bn, up from £9.4bn in the second half of FY26, still weighted towards lower-margin product transfers. Mortgage member firms fell to 1,996 after 76 dormant firms were removed, while Consulting members were 426.

Risks and dates

Risks include market falls reducing AUM and fees, adviser consolidation disrupting flows, regulatory change affecting advice and platform pricing, and a subdued mortgage market for Paradigm. The board said full-year expectations are unchanged. The interim results should show how much of the half's asset growth translated into revenue and margin, and whether second-half flows have started recovering towards the guided range.

Interim results are due on Tuesday 10 November 2026, with an analyst call at 9.30am and an Equity Development investor presentation on 17 November at 1.30pm. The shares closed the 3 November session at 680p, according to LSE delayed data.