Wealth management group reports better start to second quarter trading

Paul Stockton

Rathbone Brothers, the wealth management group, predicatably, given the unprecedented conditions, reported a fall in its funds under management and administration in a first quarter trading update today, covering the period ended March 31.

However, it revealed that second quarter trading has started well, with positive net organic inflows.

Total funds under management and administration decreased by 15.4% to £42.6bn at the end of the first quarter, compared with £50.4bn at December 31, 2019.

By comparison, the FTSE 100 Index on the first quarter charging date decreased 27.4% from December 31, 2019, while the MSCI PIMFA Private Investor Balanced Index decreased by 17.3%.

There was £35.9bn in the investment management business (December 31, 2019: £43bn), and £6.8bn in the unit trusts business (December 31, 2019: £7.4bn).

Total net inflows were £0.7bn in the first quarter (Q1 2019: £0.2bn).

Total underlying net operating income of £84.6m for the three months ended March 31, was consistent with last year (Q1 2019: £85.3m).

Income in investment management totalled £74.9m in the quarter, down 2.2% on the £76.6m reported in the corresponding period in 2019.

The value of the FTSE 100 Index on the first quarter charging date was 5416 compared with 7447 a year ago. The MSCI PIMFA Private Investor Balanced Index was 1389 compared with 1610 on the equivalent dates.

Total funds under management and administration at April 30 were £46.5bn, an increase of 9.2% from April 5, 2020 (investment management: £39.2bn; unit trusts: £7.3bn).

The final dividend for December 31, 2019 of 45p per share will be paid on May 12.

According to the Pridham Report, Rathbones, which has a key operation in the Port of Liverpool Building in the city, was ranked 10th for overall net retail sales during the first quarter of 2020, maintaining its top 10 position.

Chief executive Paul Stockton said: “I am very proud of the way our people and infrastructure have responded to the COVID-19 crisis.

“Our business model is robust and has rapidly adjusted to ways of working remotely whilst continuing to provide clients with quality service, investment solutions and advice, at a time when they need it most.

“Funds under management and administration of £42.6bn decreased by 15.4% from 31 December 2019, which is a resilient performance against a market backdrop where the FTSE 100 Index fell 27.4% in the first quarter.

“Clients from the personal injury and Court of Protection business of Barclays Wealth joined us at the end of the quarter, representing £0.4bn of funds under management.”

He added: “The second quarter has started well with total net organic inflows during April 2020 of £0.4bn.

“There remains a great deal of uncertainty around the duration and severity of the pandemic, and we expect that global market conditions will remain volatile and interest rates low.

“Our balance sheet remains strong, and we are well positioned to continue with our strategic growth agenda, mindful of the necessity to balance the needs of the business with market conditions and the health and well-being of our employees.”