Wealth manager breaks £60bn barrier in strong third quarter

The Port of Liverpool Building

Liverpool wealth management firm Rathbone Brothers achieved strong third quarter results, with total funds under management and administration (FUMA) passing the £60bn mark.

And it will have the integration of recent acquisition Saunderson House to add to its fourth quarter results, it said today.

The firm, which operates from waterfront offices at the Port of Liverpool Building, updated markets today, revealing that FUMA had hit £60.9bn, compared with £54.7bn at December 31, 2020, an 11.3% increase.

Its investment management business held £48.8bn, up from £44.9bn at December 31, 2020, and the Rathbone Funds business had £12.1bn, up from £9.8bn in the same period.

The investment management business recorded gross inflows of £1.1bn in the third quarter, nearly doubling the £639m recorded in the same period in 2020. Net organic inflows continued to be positive at £329m (Q3 2020: net outflows of £169m), representing an annualised organic growth rate of 2.8%.

Rathbone Funds recorded £1.1bn gross inflows in the period (Q3 2020: £867m).

Net inflows totalled £563m (Q3 2020: £395m), representing annualised net organic growth of 19.8% (Q3 2020: 19.6% annualised), with particularly strong net inflows into the multi-asset portfolio funds, ethical bond fund and global opportunities fund. Rathbone Funds also ranked seventh for overall net retail sales during the second quarter in the most recent Pridham report.

Underlying net operating income was £106.4m for the three months ended September 30, 2021, an increase of 22.3% from the £87m for the three months ended September 30, 2020.

Investment management fees were up 28.2% compared with the 2020 third quarter due to positive markets and the transition of former Speirs & Jeffrey clients to Rathbones standard tariffs.

Commission income of £10.8m was 8.9% lower than a year ago, reflecting a return to more normalised levels.

Net interest income totalled £0.9m (Q3 2020: £2.2m) reflecting UK base rate reductions in place since March 2020.

Fees from advisory services and other income increased by 11.1% to £4.9m (Q3 2020: £4.5m), reflecting good growth in both Vision Independent Financial Planning and Rathbone Financial Planning.

Income in Rathbone Funds, which accrues daily, totalled £17m as a result of substantial funds growth throughout the year, an increase of 45.9% on the £11.7m reported for the third quarter in 2020.

The acquisition of Saunderson House is anticipated to complete during the fourth quarter and will be reported as acquired new business in that period.

Chief executive, Paul Stockton, said: “Following a strong third quarter of growth, our total funds under management and administration reached £60.9bn at 30 September 2021.

“Positive net organic inflows in investment management and record net inflows into Rathbone Funds reflect our continuing momentum and delivery against the strategic priorities we have set out for growth.”

He added: “We continue to transform our digital capability and client experience and welcome the addition of Saunderson House’s capability in the fourth quarter.

“With a clear direction and strong balance sheet, we are confident that our current plans place us in a strong position to take advantage of future growth opportunities across the Rathbones Group.”