Schroders Personal Wealth (SPW) has picked up the pace over the first half of the year and returned to net inflows thanks to a spike in client referrals from Lloyds.
Clients ploughed £100m into the Schroders and Lloyds-backed joint venture in the six months to 30 June 2021, according to Schroders latest set of results.
Despite bringing in the same amount in H1 2020, the wealth manager struggled to hold onto assets during the Covid crisis, and was stung by £200m worth of redemptions.
Schroders said SPW benefited from a spike in client referrals during the period. A separate report released by Lloyds showed referrals from the bank to SPW were up 133% compared to H2 2020.
SPW has struggled to gain much traction since it was launched in June 2019, during which time it has also suffered from a string of senior departures.
James Rainbow resigned four months into his appointment as chief executive and Peter Hetherington, who succeeded him, lasted less than eight months in total. Openwork boss Mark Duckworth stepped up to run the business last year.
See also: Lloyds Bank buys retirement platform Embark for £390m
Schroders’ wealth arm rakes in £1bn from clients
Schroders reported “good momentum” generally across its wider wealth management business, with strong revenue growth and continued client demand in the first half of 2021.
Net income was up 15% to £214.9m, compared to £187.6m the year before, a surge primarily driven by “high management fees”.
Profit before tax was up 10% at £66.5m for the half year 2021, compared to £60.3m for the same period the year before, and client demand for its wealth offering gathered pace as new net business reached £1bn during the period, though this was £0.3bn lower than the year before.
Total assets at its wealth manager arm rose to £76.3bn, compared to £72bn for its full year 2020.
Schroders assets smash £700bn
Meanwhile across the wider group Schroders reported profits before tax for the first six months of 2021 were up at £407.5m, as net new business climbed to £17.9bn, while total assets grew to a record £700.4bn, a 6% increase.
The FTSE 100 group’s asset management business also saw net income spike 23% to £1.2bn, compared to £835.6m in H1 2020.
Profit before tax was up at £334.5 million for the asset manager, compared to £260.3m for the same period in 2020.
Commenting on the results chief executive Peter Harrison (pictured) said: “The business performed strongly during the first half of the year, delivering a 33% increase in profits. These results reflect the benefit of our organic growth initiatives, strong investment performance and our leadership position in sustainability.
“Assets under management reached a new high of £700bn underpinned by demand for our higher margin equity focused mutual funds, especially from clients in the US and Continental Europe. Our investment teams delivered excellent investment performance for our clients again with 82% of assets outperforming over five years.”
