Mattioli Woods has seen its pre-tax profits jump by 36 per cent to reach £13.4m as a result of the firm’s swift action to cut costs during the pandemic.
In its final results for the year ended May 31, 2020, published this morning (September 2), Mattioli Woods reported revenues had risen by 1.6 per cent to £58.4m while operating profits were up by a third.
The firm said this was “significantly ahead of expectations” and reflected action taken to protect its financial position in light of Covid-19, which included rebasing executive salaries, not paying staff bonuses and a close management of spend.
Revenue growth was also helped by the Broughtons and Ssas Solutions businesses acquired in the prior year, plus £200,000 of revenues from Turris following its acquisition in December 2019.
Ian Mattioli, chief executive officer of Mattioli Woods, said todays’ results provided a buffer for the business to respond to further challenges arising from Covid-19 but he expects reversing bonus cost savings in the future would lead profit margins to revert to normal levels for the coming year.
FTAdviser reported in July that the firm had saved £150,000 after all directors reduced their basic salary in April, with a further £2.7m in cost savings after the firm decided to not pay any staff bonuses for the current financial year.
Mr Mattioli said: “The essence of what we do is looking after our clients' money and there is an expectation that we should apply the same diligence in looking after that of our business and our shareholders. Current trading is in line with our expectations and we can see light at the end of the Covid-19 tunnel.”
He added: “We expect that uncertainty around Brexit and the impact of Covid-19 will continue to influence investor and consumer sentiment in the short-term, but we believe the opportunity for Mattioli Woods is significant, as people seek to take charge of their money and manage it through the generations.
“At the same time, savings and investments are becoming more complicated. Clients need long-term advice and strategies more than ever before.
“We will continue to provide quality solutions, maintaining our focus on client service and continuing to adapt our business model to the changing market, integrating asset management and financial planning to build upon our established reputation for delivering sound advice and consistent investment performance, while looking to reduce clients' costs.”
The wealth manager reported that although the flow of new business continued to be impacted by ongoing political and economic uncertainties, a total of 558 (2019: 762) new Sipp, Ssas and personal clients with assets totalling £155m (2019: £213m) joined Mattioli Woods during the year.
Recurring revenues, which come from ongoing adviser charges, annual fees and other management charges, represent 92.1 per cent of total revenue.
The firm also noted the Financial Services Compensation Scheme levy had caused its regulatory fees and levies for the 2020/21 year to increase to £1.1m, up from £800,000 in 2019/20.
The firm said this was “driven by further increases in the FSCS levy due to Sipp and pension advice claims in the wider market, and we expect these costs will continue to increase over the next few years”.