Rathbones Group
Plc
THIRD QUARTER TRADING
UPDATE
Rathbones
Group Plc ("Rathbones" or the "Group") announces a trading update
for the three months ended 30 September 2024
Paul Stockton, Group Chief Executive
Officer of Rathbones, said:
"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. 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 £25.5
million at the end of the third quarter, significantly ahead of the
first-year post-combination objective of £15 million.
"Net flows in the quarter reflected
the resilience of gross inflows despite the impacts of managing a
significant client consent process. Gross outflows have been
impacted by the completion of Saunderson House migration, alongside
some of the macroeconomic and specific factors we have seen, and
which have 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."
Financial highlights:
- Funds under management and administration (FUMA) totalled
£108.8 billion at 30 September 2024 (30 June 2024: £108.9 billion,
31 December 2023: £105.3 billion).
-
£93.3 billion in the Wealth Management segment
(£99.0 billion prior to the elimination of Wealth Management FUMA
invested in the Asset Management segment of £5.7
billion).
-
£15.5 billion in the Asset Management
segment.
- Gross inflows were resilient at £2.8 billion in the third
quarter (Q2 2024: £3.1 billion) offset by elevated outflows of £3.4
billion in the period (Q2 2024: £3.2 billion).
-
Net inflows in Rathbones Investment Management
discretionary & managed propositions remained positive in the
third quarter at £147 million, (Q2 2024: £135 million),
representing an annualised growth rate of 1.1% for the quarter and
1.7% for the nine months to 30 September (£635 million).
-
The migration of former Saunderson House FUMA was
completed on 31 July 2024. £245 million of FUMA from clients who
did not complete the consent process has been reported as a net
outflow in this quarter.
-
Net outflows in IW&I totalled £251 million (Q2
2024: net inflows of £178 million). Whilst the client consent
process continues to progress well, gross inflows were to an extent
impacted by the time required to manage the process. Investment
manager turnover post combination remains very low such that
outflows relating to previous departures were consistent with those
seen in Q2.
-
Flows in single strategy funds continue to reflect
the challenging environment for active managers. Net outflows were
£157 million in the third quarter (Q2 2024: outflows of £105
million), limited by first quartile performance over 1, 2 and 5
years in our largest funds.
- Operating income for the Group totalled £220.6 million (Q2
2024: £223.8 million), despite the seasonal reduction in commission
volumes over the quieter summer months and lower interest rate
conditions combined with some reduction in client money
balances.
- Synergy delivery has increased to £25.5 million per annum on a
cash run-rate basis, largely due to organisational changes and our
property consolidation programme being secured ahead of the planned
timeframe.
Full year results 2024:
Results for the 12 months to 31
December 2024 will be announced on 26 February 2025. A Q4 trading
update will be published on 16 January 2025.
Detailed financial
information1:
Net Operating Income
|
|
3 months ended 30
September
|
9 months ended 30
September
|
|
|
2024
|
2023
|
Change
|
2024
|
2023
|
Change
|
|
Wealth Management
|
(£m)
|
(£m)
|
(%)
|
(£m)
|
(£m)
|
(%)
|
|
- Fees
|
144.5
|
69.0
|
109.4
|
429.2
|
207.8
|
106.5
|
|
- Commissions
|
20.7
|
9.5
|
117.9
|
67.9
|
33.2
|
104.5
|
|
- Net interest income
|
15.5
|
12.3
|
26.0
|
47.3
|
32.4
|
46.0
|
|
- Fees from advisory services & other
income2
|
19.0
|
12.0
|
58.3
|
62.9
|
35.2
|
78.7
|
|
|
199.7
|
102.8
|
94.3
|
607.3
|
308.6
|
96.8
|
|
Asset Management
|
20.9
|
17.6
|
18.8
|
60.7
|
49.8
|
21.9
|
|
Net operating
income
|
220.6
|
120.4
|
83.2
|
668.0
|
358.4
|
86.4
|
|
|
|
|
|
|
|
|
1. As outlined in Rathbones' Q1 2024
interim management statement published on 9 May 2024, Rathbones
included additional profitability metrics
to support the reporting requirements of Investec Plc (Investec).
Investec's regulatory reporting requirements are now such that this
is no longer necessary. Investec will therefore incorporate
Rathbones' latest published half year or full year results in their
half year and annual reporting. Consequently, Rathbones has now
reverted to its previous level of disclosure in its quarterly
trading updates.
2. Including income from trust, tax,
financial planning services and Vision Independent Financial
Planning. Other income also includes net interest margin on client
money balances, which includes that relating to IW&I. In the
prior year comparative, interest margin on client money balances
(£1.0m for the 3 months ended 30 September 2023 and £3.2m for the 9
months ended 30 September 2023) were classified within net interest
income and have now been reported in Fees from advisory services
& other income.
Funds under management and
administration
(I) Segment fuma
|
9 months ended 30
September 2024
|
Wealth Management
(£m)
|
Asset Management
(£m)
|
Intra-group holdings
(£m)
|
Group FUMA
(£m)
|
|
Opening
FUMA
|
96,118
|
13,770
|
(4,548)
|
105,340
|
|
Gross Inflows
|
7,059
|
3,394
|
(1,557)
|
8,896
|
|
Gross Outflows
|
(7,950)
|
(2,827)
|
731
|
(10,046)
|
|
Net
Flows
|
(891)
|
567
|
(826)
|
(1,150)
|
|
Transfers
|
(84)
|
84
|
-
|
-
|
|
Market & Investment Performance
|
3,870
|
1,098
|
(353)
|
4,615
|
|
Closing
FUMA
|
99,013
|
15,519
|
(5,727)
|
108,805
|
(Ii) Breakdown of FUMA and flows by
service level
|
9 months ended 30
September 2024
|
Opening FUMA
(£m)
|
Gross Inflows
(£m)
|
Gross Outflows
(£m)
|
Net Flows
(£m)
|
Transfers3
(£m)
|
SHL Migrated Assets
(£m)
|
Market & Investment Performance
(£m)
|
Closing FUMA
(£m)
|
Ann Net Growth4
(%)
|
|
Rathbones
Investment Management
|
48,759
|
3,672
|
(3,219)
|
453
|
11
|
1,275
|
1,857
|
52,355
|
1.2
|
|
Bespoke portfolios
|
45,004
|
3,272
|
(2,947)
|
325
|
(386)
|
828
|
1,670
|
47,441
|
1.0
|
|
Managed via in-house
funds
|
3,755
|
400
|
(272)
|
128
|
397
|
447
|
187
|
4,914
|
4.5
|
|
Multi-asset
funds5
|
2,545
|
805
|
(623)
|
182
|
84
|
-
|
247
|
3,058
|
9.5
|
|
Rathbones
discretionary & managed
|
51,304
|
4,477
|
(3,842)
|
635
|
95
|
1,275
|
2,104
|
55,413
|
1.7
|
|
Non-discretionary service
|
752
|
18
|
(34)
|
(16)
|
(58)
|
-
|
5
|
683
|
(2.8)
|
|
IW&I
|
42,267
|
3,053
|
(3,705)
|
(652)
|
(249)
|
-
|
1,677
|
43,043
|
(2.1)
|
|
Saunderson
House6
|
1,590
|
68
|
(494)
|
(426)
|
-
|
(1,278)
|
114
|
-
|
(35.7)
|
|
Single-strategy funds
|
6,677
|
1,032
|
(1,473)
|
(441)
|
-
|
-
|
498
|
6,734
|
(8.8)
|
|
Execution only
|
2,750
|
248
|
(498)
|
(250)
|
212
|
3
|
217
|
2,932
|
(12.1)
|
|
Total
group
|
105,340
|
8,896
|
(10,046)
|
(1,150)
|
-
|
-
|
4,615
|
108,805
|
(1.5)
|
|
Q3 ended 30 September
2024
|
Opening FUMA
(£m)
|
Gross Inflows
(£m)
|
Gross Outflows
(£m)
|
Net Flows
(£m)
|
Transfers3
(£m)
|
SHL Migrated Assets
(£m)
|
Market & Investment Performance
(£m)
|
Closing FUMA
(£m)
|
Ann Net Growth4
(%)
|
|
Rathbones
Investment Management
|
51,363
|
1,302
|
(1,159)
|
143
|
14
|
650
|
185
|
52,355
|
1.1
|
|
Bespoke portfolios
|
46,727
|
1,176
|
(1,053)
|
123
|
(80)
|
555
|
116
|
47,441
|
1.1
|
|
Managed via in-house
funds
|
4,636
|
126
|
(106)
|
20
|
94
|
95
|
69
|
4,914
|
1.7
|
|
Multi-asset
funds5
|
2,992
|
204
|
(200)
|
4
|
-
|
-
|
62
|
3,058
|
0.5
|
|
Rathbones
discretionary & managed
|
54,355
|
1,506
|
(1,359)
|
147
|
14
|
650
|
247
|
55,413
|
1.1
|
|
Non-discretionary service
|
707
|
6
|
(11)
|
(5)
|
(19)
|
-
|
-
|
683
|
(2.8)
|
|
IW&I
|
43,277
|
926
|
(1,177)
|
(251)
|
(46)
|
-
|
63
|
43,043
|
(2.3)
|
|
Saunderson
House6
|
820
|
10
|
(255)
|
(245)
|
-
|
(651)
|
76
|
-
|
(119.5)
|
|
Single-strategy funds
|
6,845
|
268
|
(425)
|
(157)
|
-
|
-
|
46
|
6,734
|
(9.2)
|
|
Execution only
|
2,903
|
89
|
(139)
|
(50)
|
51
|
1
|
27
|
2,932
|
(6.9)
|
|
Total group
|
108,907
|
2,805
|
(3,366)
|
(561)
|
-
|
-
|
459
|
108,805
|
(2.1)
|
(iiI) Breakdown of WEALTH Management
FUMA and flows by channel
|
9 months ended 30
September 2024
|
Opening FUMA
(£m)
|
Gross Inflows
(£m)
|
Gross Outflows
(£m)
|
Net Flows
(£m)
|
Transfers3
(£m)
|
SHL Migrated Assets
(£m)
|
Market & Investment Performance
(£m)
|
Closing FUMA
(£m)
|
Ann Net Growth4
(%)
|
|
Total direct
|
34,411
|
2,287
|
(2,333)
|
(46)
|
(181)
|
1
|
1,350
|
35,535
|
(0.2)
|
|
Total financial adviser linked
|
14,348
|
1,385
|
(886)
|
499
|
192
|
1,274
|
507
|
16,820
|
4.6
|
|
Total discretionary service
|
48,759
|
3,672
|
(3,219)
|
453
|
11
|
1,275
|
1,857
|
52,355
|
1.2
|
|
Execution only
|
2,750
|
248
|
(498)
|
(250)
|
212
|
3
|
217
|
2,932
|
(12.1)
|
|
Non-discretionary service
|
752
|
18
|
(34)
|
(16)
|
(58)
|
-
|
5
|
683
|
(2.8)
|
|
Total wealth management
|
52,261
|
3,938
|
(3,751)
|
187
|
165
|
1,278
|
2,079
|
55,970
|
0.5
|
|
IW&I
|
42,267
|
3,053
|
(3,705)
|
(652)
|
(249)
|
-
|
1,677
|
43,043
|
(2.1)
|
|
Total wealth management for enlarged group
|
94,528
|
6,991
|
(7,456)
|
(465)
|
(84)
|
1,278
|
3,756
|
99,013
|
(0.7)
|
|
Q3 ended 30 September
2024
|
Opening FUMA
(£m)
|
Gross Inflows
(£m)
|
Gross Outflows
(£m)
|
Net Flows
(£m)
|
Transfers3
(£m)
|
SHL Migrated Assets
(£m)
|
Market & Investment Performance
(£m)
|
Closing FUMA
(£m)
|
Ann Net Growth4
(%)
|
|
Total direct
|
35,450
|
809
|
(821)
|
(12)
|
(27)
|
1
|
123
|
35,535
|
(0.1)
|
|
Total financial adviser linked
|
15,913
|
493
|
(338)
|
155
|
41
|
649
|
62
|
16,820
|
3.9
|
|
Total discretionary service
|
51,363
|
1,302
|
(1,159)
|
143
|
14
|
650
|
185
|
52,355
|
1.1
|
|
Execution only
|
2,903
|
89
|
(139)
|
(50)
|
51
|
1
|
27
|
2,932
|
(6.9)
|
|
Non-discretionary service
|
707
|
6
|
(11)
|
(5)
|
(19)
|
-
|
-
|
683
|
(2.8)
|
|
Total wealth management
|
54,973
|
1,397
|
(1,309)
|
88
|
46
|
651
|
212
|
55,970
|
0.6
|
|
IW&I
|
43,277
|
926
|
(1,177)
|
(251)
|
(46)
|
-
|
63
|
43,043
|
(2.3)
|
|
Total wealth management for enlarged group
|
98,250
|
2,323
|
(2,486)
|
(163)
|
-
|
651
|
275
|
99,013
|
(0.7)
|
(iV) Total Group FUMA
|
9 months ended 30
September 2024
|
Opening FUMA
(£m)
|
Gross Inflows
(£m)
|
Gross Outflows
(£m)
|
Net Flows
(£m)
|
Transfers3
(£m)
|
SHL Migrated Assets
(£m)
|
Market & Investment Performance
(£m)
|
Closing FUMA
(£m)
|
Ann Net Growth4
(%)
|
|
Rathbones Investment Management
|
52,261
|
3,938
|
(3,751)
|
187
|
165
|
1,278
|
2,079
|
55,970
|
0.5
|
|
Rathbones Asset Management
|
13,770
|
3,394
|
(2,827)
|
567
|
84
|
-
|
1,098
|
15,519
|
5.5
|
|
IW&I
|
42,267
|
3,053
|
(3,705)
|
(652)
|
(249)
|
-
|
1,677
|
43,043
|
(2.1)
|
|
Saunderson
House6
|
1,590
|
68
|
(494)
|
(426)
|
-
|
(1,278)
|
114
|
-
|
(35.7)
|
|
Total
|
109,888
|
10,453
|
(10,777)
|
(324)
|
-
|
-
|
4,968
|
114,532
|
(0.4)
|
|
Group
eliminations7
|
(4,548)
|
(1,557)
|
731
|
(826)
|
-
|
-
|
(353)
|
(5,727)
|
24.2
|
|
Total
|
105,340
|
8,896
|
(10,046)
|
(1,150)
|
-
|
-
|
4,615
|
108,805
|
(1.5)
|
|
|
|
|
|
|
|
|
|
|
|
3. Transfers represent client FUMA
which has transferred from one service to another and other
intra-group movements. These are excluded from net
inflows.
4. Annualised net growth in flows
calculated as net flows/opening FUMA.
5. Net inflows into multi-asset
funds include direct flows and flows into managed solutions via
in-house funds.
6. Total
funds under advice by Saunderson House, including those clients
transferred to fellow group companies totalled £4.2 billion at 30
September 2024.
7. Group eliminations represent RAM
funds that are held within portfolios managed by RIM
(£5.5 billion) and IW&I (£0.2 billion) teams.
Consequently, after excluding the RAM funds, the FUMA of each
entity is £50.5 billion in RIM and £42.8 billion within
IW&I.
17 October 2024
For further information
contact:
Rathbones Group
Plc
Paul
Stockton, Group Chief Executive Officer
Iain Hooley, Group Chief Financial Officer
Shelly Patel, Head of Investor Relations
Tel: 020 7399 0071
Email: shelly.patel@rathbones.com
Camarco
Ed Gascoigne-Pees
Julia Tilley
Tel: 020 3757 4980
Email: ed.gascoigne-pees@camarco.co.uk
Rathbones Group Plc
Rathbones provides wealth and asset
management services for private clients, charities, trustees and
professional partners. We have been trusted for generations to
manage and preserve our clients' wealth. Our tradition of investing
and acting for everyone's tomorrow has been with us from the
beginning and continues to lead us forward.
Rathbones headquarters is 30 Gresham
Street, London, EC2V 7PG.
www.rathbones.com