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Rathbones eyes low value adviser clients with new D2C service

Rathbones head of multi-asset investments David Coombs
Rathbones head of multi-asset investments David Coombs

Rathbones is launching a new managed portfolio service aimed at advisers’ lower value clients.

The service will run as a centrally managed, execution-only offering underpinned by its multi-asset portfolio funds.

The funds will be managed by head of multi-asset investments David Coombs and his team.

The firm did not reveal any further details on the offering in its results this morning.

Rathbones Unit Trust Management, however, has reported a 29 per cent increase in funds under management as it passes a record £4bn threshold.

In annual results to 31 December 2016, the unit trust division of listed entity Rathbone Brothers saw gross sales of £1.3bn over the year compared with £900m in 2015.

At group level, funds under management enjoyed a 17.1 per cent increase from £29.2bn to £34.2bn, while underlying pre-tax profits were up 6.4 per cent from £70.m to £74.9m.

Having moved head office during 2016 from London’s Curzon Street to Finsbury Circus in the City, plus expenses pertaining to client relationships and goodwill, resulted in an adjusted pre-tax profit of £50.1m – down 14.5 per cent compared with 2015.

Earnings per share were up 4.4 per cent to 122.1p, with the board recommending a final dividend of 36p for 2016, bringing total dividends for the year to 57p – a 3.6 per cent increase on 2015.

Rathbones is committed to promoting its discretionary investment management services to professional intermediaries – focusing on national and regional IFA networks – with 12 strategic relationships now in place.

The group expects flows into these outsourced portfolio solutions to be roughly £200m throughout 2017.

Against a backdrop of continued political and economic uncertainty, core investment management reported organic growth of 2.9 per cent, falling short of its strategic target of 5 per cent.

Chief executive Philip Howell says the group will continue to invest in its investment teams, in-house financial planning capability and their respective support functions as well as continuing to look for strategic acquisition opportunities.

He says: “Despite the prospect of some volatile market conditions in 2017, we intend to maintain the momentum in our strategic growth initiatives.

“We continue to work to a target operating margin of approximately 30%. However, this may be impacted in 2017 by the £5m of additional expenditure outlined above, which will be reviewed if we encounter a prolonged market downturn during the year.

“We continue to look for accretive acquisition opportunities that fit with our culture and investment philosophy, and look forward with cautious optimism.”

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