Rathbone Brothers reports solid year for funds under management

The FTSE 250 wealth management company said that reflected both strong market movements in the final quarter, as well as continuing net inflows and strong investment performance.

It noted that the FTSE 100 Index had decreased by 14.3% at the end of December when compared to the start of the year, while the MSCI PIMFA Private Investor Balanced Index over the same period was largely unchanged.

Looking at the firm’s investment management business, Rathbone Brothers said the £44.9bn total was up 4.5% over the end of 2019, with investment performance now outperforming the MSCI PIMFA Private Investor Balanced Index over one, three and five year performance periods.

In the Rathbones Unit Trust Management division, it said the £9.8bn total was up 32% year-on-year, reflecting what the board described as “very strong” net inflows.

Total net inflows across the group in 2020 were £2.1bn, up from £0.6bn in 2019, and representing 4.2% of opening FUMA, compared to 1.3% in the prior year.

Rathbone Brothers said that gross organic inflows in the investment management business were consistent with 2019 at £3.3bn in 2020.

Acquired inflows of £0.6bn in investment management were said to be largely reflective of the transfer of the court of protection assets from Barclays Wealth of £0.4bn.

Investment management outflows for the year totalled £3.3bn, down 14.3% from 2019.

The last quarter of 2020 was impacted by the withdrawal of a low-margin mandate, as well as the withdrawal of non-fee-paying and execution-only business, amounting to £143m in total.

Full-year net inflows in the Rathbones Unit Trust Management business, meanwhile, totalled £1.5bn, up from £943m in 2019.

That represented 20.1% of opening funds under management, compared to 16.7% in the prior year.

Rathbones Unit Trust Management was ranked seventh for overall net retail sales during the third quarter, the board noted, maintaining its top 10 position for six consecutive quarters.

“Although we continue to expect market volatility during 2021 as well as continuing low interest rates, we remain focused on enhancing our services to clients and delivering growth,” the Rathbone Brothers board said in its statement.

“We will continue to balance this investment with prevailing market conditions, maintaining strict cost discipline and identifying inorganic opportunities that are a strong cultural fit.”

Rathbone Brothers said its preliminary results for the year ended 31 December would be published on 4 March.

At the same time, Rathbone Brothers said that following the conclusion of an external recruitment process, it had appointed former Phoenix Group chief executive officer Clive Bannister as chairman-designate and a non-executive director.

It had announced that Mark Nicholls would retire as chairman and as a director at the 2021 annual general meeting last February.

Bannister would join the board with immediate effect, and was expected to succeed Nicholls as chairman following the annual general meeting on 6 May, subject to regulatory approval.

At 0814 GMT, shares in Rathbone Brothers were up 1.24% at 1,619.8p.