Charles Stanley has paused a recruitment drive in its financial planning arm whilst social distancing measures remain in place amid the coronavirus pandemic.
In its latest annual results the company reported financial planning revenues had ticked up to £8.7m, an increase of 19 per cent on the previous year, but the division's pre-tax loss had also increased as a result of a number of new hires.
The wealth manager recruited six financial planners throughout last year, brining the total to 27 within the company at the end of March, but chief executive Paul Abberley said the virus outbreak had interrupted this hiring spree.
Mr Abberley said: "The strategy we set way back in 2015 was to offer holistic wealth management and we did have some financial planning capability, but it was very much de-centralised at the time. So part of the strategy was to build a modern financial planning division.
"When you first bring on a new financial planner it takes them a couple of years to build up a client base they can serve, but where we have been hiring planners in the past, they are now into their stride and profitable for the firm - so it’s very much a strategy which is working.
"We do intend over time to continue to build that division. But right now there is a pause really, because it’s not terribly practicable to bring in new hires at this time."
The business has set target revenues of £350,000 per financial planner per annum, excluding investment management fees, as it looks to move the division into profitability.
Mr Abberley said: "We are very careful and selective about the financial planners we bring on, both in terms of ensuring they are the right type of people for Charles Stanley and also that they are going to be happy working there.
"And it’s difficult to do that without actually spending time together as a result of social isolation. So there has been an interruption.
"But the plans to continue building the financial planning division remains in place."
Charles Stanley is readying itself for an increased demand for financial planning on the other side of the coronavirus pandemic as the "financial impact of the crisis may well cause potential clients to reassess their own arrangements".
Earlier today Charles Stanley reported a jump in profits of 45 per cent across the group, growing to £19.3m at the end of March following a repricing exercise last year which saw the business increase its rates for investment management services in line with the rest of the market.
This was despite its funds under management taking a significant hit of £4bn throughout the year, driven by the coronavirus fallout and its impact on global markets in the first three months of 2020.
Charles Stanley attributed its increased profits to a repricing exercise completed by the company a year ago, which saw the business increase its rates for investment management services in line with the rest of the market.
rachel.mortimer@ft.com
What do you think about the issues raised by this story? Email us on fa.letters@ft.com to let us know.
