Key facts
- Rathbones reported net outflows of £0.9bn in the first half of the year.
- The company expects costs from an FCA probe into compliance shortcomings to reach £60m.
- Funds under management and administration increased to £120.7bn.
- Profit before tax rose 15.7% to £72.1m.
- Acquisition and integration costs decreased significantly.
Rathbones has reported net outflows of nearly £1 billion in the first half of the year, as the wealth manager braces for further costs associated with a Financial Conduct Authority (FCA) probe. The probe, initiated due to concerns over compliance shortcomings, is expected to incur costs of up to £60 million, with £19 million already spent.
These costs include ceasing fees on the cash elements of portfolios, a move anticipated to reduce income and operating profit by £9 million. Despite these challenges, Rathbones' funds under management and administration (FUMA) increased by 10.7% year-on-year to £120.7 billion. Profit before tax saw a 15.7% rise to £72.1 million.
Acquisition and integration costs have declined to £9.5 million, down from £23.2 million in the previous year, reflecting the progression beyond the acquisition phase of Investec Wealth & Investment. The company also completed a £50 million share buyback programme and increased its interim dividend to 3.2p from 3.0p.
Chief executive Jonathan Sorrell stated that the regulatory programme to address the FCA's recommendations is a key priority, noting positive client reaction and resilient performance. He reiterated the company's long-term ambition to be the leading wealth manager in the UK.