Total group funds under management grew by 13.4% to £18bn in the year to 31 December and while this represented “a very satisfactory growth rate” Pomfret said it had become more difficult in the face of such preoccupations.
“Firstly, a number of clients have suffered a reduction on the income level that can be achieved from their portfolio in the past few years and as a result are withdrawing capital in order to maintain lifestyle.
“Secondly, the number of introductions we have had from independent financial advisers has decreased in the second half of 2012 as many have spent the past few months concentrating on their preparedness for the RDR,” he added.
Such significant impacts are expected to continue into 2013, Pomfret said, although in the longer term he hopes changes in the advisory landscape might lead to further consolidation in the market, giving Rathbones opportunity to target better, higher quality and well-established IFA firms.
The firm was also impacted by the loss of £62m in discretionary assets: £31m from the loss of the mandate for the Albany Investment Trust, which the firm had managed for 60 years and a further £31m of funds originally introduced by Cavanagh Asset Management which transferred them to Close Brothers upon its acquisition by the company.
“Relationships with significant introducers can be very beneficial as they introduce us to clients with very little marketing effort, but equally there is the danger that material amounts can be withdrawn at very short notice,” Pomfret said.
Detailing acquisition activity of its own, Rathbones said it had purchased Taylor Young Investment Management’s private client base in November, which was expected to add up to £350m to funds under management in 2013 as clients are migrated over to Rathbones.
In connection with this eight Taylor Young staff have already joined the company. Another deal saw £76m in funds transferred to Rathbones after it acquired 100% of the share capital of RM Walkden & Co.
Rathbones’ pre-tax profit was £38m for the year down 1% on the year to 31 December 2011. Its unit trust management arm saw positive net monthly sales throughout 2012 which increased funds under management by 16.5% year-on-year to £1.27bn.