Schroders profits jump as asset managers defy FCA scrutiny of sector with strong results

Schroders’ pre-tax profit for 2017 was more than £760m, results released this morning reveal, despite fears that the FCA’s work in the sector would drive down asset manager margins.

Schroders reported a 23 per cent increase in profit before tax, as well as a 13 per cent increase in assets under management to £447bn.

The firm’s wealth management activities, which include revenue from its stake in financial advice network Best Practice, accounted for £67m of the profit, with clients introducing £2bn of net new money.

Yesterday, Jupiter reported profits of nearly £200m as asset managers continue a strong results season.

In the FCA’s asset management market study last year, the regulator noted the stubbornly high margins in the sector, questioning whether current models are offering investors value for money.

It also pledged to look further at vertically integrated models, where fund managers are also involved in other parts of the distribution chain like platforms and financial advice.

Schroders chief executive Peter Harrison says: “There are headwinds facing the industry but we continue to believe that there remain opportunities for growth. Our diversified business model, ongoing focus on costs, strong financial position and willingness to invest mean that we continue to be well placed.

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