Rathbones Group’s net operating income grew organically by 6.5% to £120.4m over three months to the end of September, according to the firm’s latest quarterly results.
Assets under management (AUM) in its investment management arm remained flat at £45.4bn, while AUM in its funds business ticked up by 2.5%, from £12.2bn to £12.5bn. Meanwhile, assets within Saunderson House – which the firm purchased in October 2021 – fell by £900m, or 31%, to £2bn, as Rathbones continues the migration of assets and funds across to the main business.
According to the report, Rathbones expects the migration to be fully completed by the end of Q1 2024, which should achieve a revenue margin of 55 basis points.
While net operating income for the firm increased from £113m to £120.4m over the quarter, fee income and commission dipped by 1.4% from £79.6m to £78.5m compared to the same time frame last year. Fees from advisory services also fell from £12.4m to £11m (11.3%), although Rathbones said this was expected given “time-based charges” during the Saunderson House transition.
Fee income overall increased by 14.3% over the quarter from £15.4m to £17.6m, which the firm said was the result of £934m of inflows from the Saunderson House migration.
When taking the firm’s acquisition of Investec Wealth & Investment into account, which completed on 21 September, its total assets under management increased by 40% to £100.7bn.
See also: Tatton enjoys 7.7% asset increase in half-year results
Flows
Inflows into discretionary and managed products reached £100m for the three months to the end of September, compared to inflows of £400m over the same period last year. This translates into a 1.2% annualised growth rate, compared to 3.3% in Q3 2022.
While Rathbones saw strong gross inflows of £1.2bn, the firm said these were “largely offset by a continued trend in elevated outflows that reflect current conditions”.
Paul Stockton (pictured), group chief executive of Rathbones, said: “In September we were delighted to announce the completion of our combination with Investec Wealth and Investment UK, welcoming new clients and colleagues into the Rathbones group.
“There is already a strong level of collaboration across the enlarged group and an ongoing dedication to keeping clients’ interests at the forefront of everything we do.”
“We delivered net inflows in wealth management in the quarter in spite of a market backdrop that remains challenging and higher outflows as clients use funds to repay debt or prefer to hold assets in cash for the short term.”
He added: “We continue to engage meaningfully with our clients, tailoring our propositions to support their needs. In accordance with consumer duty, both Rathbones and IW&I are committed to acting in the best interests of clients and we remain priced competitively in the market.”
