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Henderson hit with £7.6m FSCS levy as profits jump 37 per cent

Henderson Group has been slapped with a £7.6m interim levy from the Financial Servies Compensation Scheme as the firm announced a 37 per cent increase in underlying profit before tax for the last financial year.

Underlying profit before tax stood at £100.7m for 2010, compared to £73.7m in 2009, Henderson has also revealed an 11 per cent increase in assets under management to £58.7bn.

The group has seen higher margin inflows of £2bn in 2010, up from £700m in 2009, while the operating margin increased by 9 per cent to 30 per cent. Henderson says this is due to higher market levels, positive higher margin inflows, as well as the benefits of the New Star acquisition in April 2009 and continued cost control.

The board has proposed a final dividend for the full year of 4.65p, up from 4.25p in 2009.

Last month,The Financial Services Compensation Scheme announced a £93m interim levy on advisers. The levy includes FSCS compensation costs of £86m, mainly to compensate Lifemark investors, and management expenses of £7m. In addition investment fund managers are to be billed £233m – meaning the total FSCS interim levy is £326m.

Henderson chief executive Andrew Formica says: “2010 was characterised by recovery in the global economy, although the effects of the global financial crisis continued to be felt.

“Market conditions improved and equity markets ended higher, but the path was not smooth and was lined with episodes of volatility and uncertainty.”

Earlier this year, Henderson announced plans to acquire Gartmore for an estimated £335m.

Formica says: “This acquisition will reinforce our position as a diversified asset manager bringing with it a credible traditional and absolute return franchise as well as additional investment strengths, and it will significantly strengthen our presence amongst UK retail investors. We are making good progress and we expect to complete this acquisition in early April.”

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Auto-enrolment: pay attention or pay the price

By Simon Fletcher

As a chief executive officer of a business in the financial services sector, I have been dealing with the introduction of auto-enrolment for our clients for some time, but I can also speak from an employer’s point of view, having to go through the process ourselves.

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