Chief executive officer of Mattioli Woods, Ian Mattioli, has agreed to take an ongoing reduction of 60 per cent of his basic salary from next month in a move to protect the company’s financial position.
This comes after he reduced his basic salary to zero from April until the end of June in response to the coronavirus crisis.
In an update this morning (June 1), the firm also reported that executive directors' salaries were being temporarily rebased from July 1, 2020 after all other directors agreed to reduce their basic salary or fees by 50 per cent until June 30.
This is expected to create an annual saving of £400,000.
All other employees' basic salaries will be maintained, with the firm looking to review its position at the end of November.
The firm previously confirmed to staff that they will not receive any bonuses for the current financial year with the funds instead going to help address the impact of coronavirus.
Mr Mattioli said: “Ensuring our clients and the group are in a strong position is key.
“Having reduced my basic salary to zero from 1 April I am happy to take an ongoing reduction of over 60 per cent of basic salary from 1 July, which sits alongside the positions we have agreed regarding other senior executives' pay and staff bonuses, all of which enable us to start the new year with clarity around our financial position and strategic plan.
“I believe that providing our people with security around their own positions will see our clients and the business through this complex period.”
"I cannot express enough how much I appreciate our people's endeavour and their dedication to Mattioli Woods and our clients.”
The firm is also making administrative cost savings expected to achieve further savings of £400,000 over the next 12 months
Due to the firm operating a fee-based model, its revenues are less likely to be hit by volatility in investment markets.
The firm therefore expects total revenue for the year ended May 31, 2020 to be marginally ahead of the prior financial year as demand for advice continues to boost income.
The update stated: “Due to the material impact of our decision not to pay bonuses, coupled with those cost savings already achieved to date, we anticipate the group's profit for the year ended 31 May 2020 will now be circa 20 per cent ahead of expectations.”
In March, Mattioli Woods announced it would acquire private client adviser and asset manager Hurley Partners in a deal worth up to £25.6m.
The acquisition is subject to regulatory approval and is expected to complete in 2020.
The firm stated: “The group is in a strong financial position and following the completion of the acquisition of Hurley Partners it will continue to have significant cash balances and headroom on its regulatory capital requirements.”
What do you think about the issues raised by this story? Email us on firstname.lastname@example.org to let us know.