Rathbones funds under management stable

Rathbones Group reported a stable level of funds under management and administration (FUMA) on Thursday, of £108.8bn as at 30 September, marginally down from £108.9bn at the end of June.

The FTSE 250 company said that included £93.3bn in its wealth management segment, and £15.5bn in asset management.

Gross inflows remained resilient at £2.8bn for the quarter, although they were offset by elevated outflows of £3.4bn.

Despite the outflows, Rathbones said its investment management division saw positive net inflows of £147m, up from £135m in the last quarter, achieving an annualised growth rate of 1.1% for the quarter and 1.7% for the year to date.

The board said the migration of former Saunderson House clients was completed on 31 July, but added that £245m of funds under management and administration was reported as a net outflow due to clients not completing the consent process.

Investment manager turnover remained low following the combination with Investec Wealth & Investment (IW&I), but net outflows in IW&I totalled £251m for the quarter, in contrast to net inflows of £178m in the second quarter.

The board said the challenging environment for active managers continued to affect flows in Rathbones' single strategy funds, which saw net outflows of £157m, a slight increase from the £105m outflows recorded in the second quarter, despite strong performance in the firm’s largest funds over one, two, and five years.

Operating income for the group totalled £220.6m, down slightly from £223.8m in the second quarter, reflecting the quieter summer period and lower client money balances.

The group’s synergy delivery from its integration with Investec had meanwhile increased to £25.5m per annum, driven by accelerated organisational changes and property consolidation.

“The integration of Investec Wealth & Investment (IW&I) has progressed at pace throughout the summer, and we remain focused on actions that support the delivery of the financial goals we set ourselves at the outset,” said group chief executive officer Paul Stockton.

“Over 80% of clients have been asked for their consent to move their accounts to Rathbones Investment Management from IW&I and response rates are very positive. Run-rate synergy realisation grew to £25.5m at the end of the third quarter, significantly ahead of the first-year post-combination objective of £15m.

“Net flows in the quarter reflected the resilience of gross inflows despite the impacts of managing a significant client consent process.”

Stockton said gross outflows were impacted by the completion of Saunderson House migration, alongside some of the macroeconomic and specific factors seen, and which had impacted the industry this year.

“The potential for taxation changes in the forthcoming Autumn budget has created a heightened opportunity for us to engage positively with our clients and Rathbones remains well positioned to support clients to make the decisions needed to achieve their financial goals.”

At 0858 BST, shares in Rathbones Group were down 2.28% at 1,800p.

Reporting by Josh White for Sharecast.com.