View more on these topics

River and Mercantile sets aside £1m for FCA competition probe

River and Mercantile has set aside £1m through a reduction in director pay in response to the a recent FCA competition investigation.

In its half-year update, the firm has also issued a statement on the recent departure of his high profile fund manager Philip Rodrigs.

Following the FCA investigation on a breach of competition law issued in November, R&M says there were a “number of uncertainties” around the final outcome of the probe but has decided to make the provision after taking advice, 50 per cent of which has been funded by a reduction in the directors’ variable remuneration.

R&M chairman Jonathan Dawson says: “While the outcome for the previously announced FCA competition matter is still uncertain, the board believes that it is prudent to recognise a provision together with a reduction in variable remuneration expense.”

R&M reassured investors it has put in place improved systems and controls following the FCA probe.

In separate comment, R&M chief executive Mike Faulkner addressed the recent departure of Philip Rodrigs.

Faulkner says the fund manager’s departure has been well received by clients but stressed on the fact that this did not represented a cultural issue at the firm.

He says:”Every business will suffer issues such as these, even great firms. The test of a business is not its avoidance of them – which is impossible – but rather the way it navigates them when they arrive…

“We take our culture and conduct very seriously. It is critical in a business model where we are focused on helping clients fully understand their needs and then solving them. As a result, when we encounter threats to these areas our approach is to deal with them decisively and openly.

“This is important in a business that is based on openness and transparency with its clients and its people. But a consequence of this approach is that it is very clear to everyone when an issue has arisen. There is little we can do about this – the alternative is far worse for the long term success of the business.”

The firm reported a fall in pre-tax profits to £11m in the second half of the year, down from £16.4m in the first half of the year. However, profits were still up by 28 per cent year-on-year.  In the six months to December, the firm saw net inflows of £800m.

Recommended

1

Equitable Life lays groundwork for potential sale

Shuttered insurer Equitable Life is eyeing a sale of its remaining business, according to reports. The mutual, which has been in run-off since closing to new business in 2000, is still technically owned by its more than 300,000 remaining policyholders, most of whom hold with-profits funds. The firm came close to closing altogether 18 years […]

2

Which firms are winning the race on wealth management?

Traditional wealth managers have proved themselves to be scalable and profitable businesses despite the hype caused by robo-advice models, analysts say. Wealth managers have also been shown to be more robust than pure asset managers amid mounting pressure on fund performance and fees. While Hargreaves Lansdown and St James’s Place continue to make the headlines […]

MM-AutumnBudgetBanner
2

Lifetime allowance 2018/19 increase confirmed but pensions absent

The Government has confirmed that the lifetime allowance 2018/19 will rise in line with inflation, but savers have been offered little else in the Autumn Budget. The lifetime allowance will increase from £1m to £1,030,000 to match CPI from 2018/19.  Though the maximum amount the can be saved each year into a Junior Isa or […]

2

A warning for advisers using strategic asset allocation models

Significant gilt weightings continue to be recommended, despite concerning signals on their risk Government bonds play a pivotal role in a balanced portfolio; there are very few assets that provide the diversification benefits gilts can bring. So often over the last 30 years, when equity markets have zigged, bond markets have zagged, thereby smoothing return […]

Derek Stuart: where to find value in the UK?

Derek discusses a number of Œself-help stories as examples of where he is finding good opportunities in the UK With the FTSE trading at historically high levels, many investors have questioned whether UK equities continue to offer value. But, as Derek points out, the headline figures mask many opportunities at a sector level. He has […]

Newsletter

News and expert analysis straight to your inbox

Sign up

Comments

    Leave a comment