Schroders Personal Wealth had net inflows of just £0.1bn during H1 2020 due to Covid-related branch closures, even though wealth management was highlighted as a bright spot in the half-year results.
At the group level, Schroders enjoyed net flows of £38.1bn amid the coronavirus crisis, compared to net outflows of £1.2bn in H1 2019.
Assets under management grew 5% to £525.8bn compared to £500.2bn at the start of the period.
Schroders chief executive Peter Harrison (pictured) said there had been strong client demand for solutions and momentum in wealth management, driven by Cazenove Capital, during H1. Schroders remains committed to both areas as well as private assets as part of its core strategy, the results said.
Schroders Personal Wealth takes a Covid hit
But wealth management was a mixed bag.
While Cazenove Capital brought in £0.8bn and Benchmark Capital brought in £0.4bn, the new joint venture with Lloyds, Schroders Personal Wealth, brought in just £0.1bn.
Schroders attributed this to branch closures impacting client referral levels.
Total assets under management slipped to £65.7bn from £66.7bn at the start of the period.
However, net income rose 30% to £187.6m compared to £144m for the same period in 2019.
Solutions blamed for Schroders’ slumping margins
In solutions, net new business totalled £42.7bn, compared to £2.1bn in H1 2019, driven in large part by the £29.5bn transfer of the remainder of the Scottish Widows mandate, which Lloyds yanked from Standard Life Aberdeen. Solutions now has £175.2bn assets under management compared to £142.8bn at the start of the period.
But its net operating revenue margin, excluding performance fees, decreased to 15 basis points compared to 22bps during the same period last year.
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Schroders blamed solutions mandates with lower revenue margins for the group wide net operating revenue margin falling from 46bps to 39bps during the six-month reporting period.
