InvestmentsOct 17 2019

Rathbones hints at acquisitions

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Rathbones hints at acquisitions

Rathbones' chief executive Paul Stockton expects the wave of consolidation currently gripping the wealth management market to continue in the years ahead, and for his firm to be part of it. 

Speaking to FTAdviser this morning in the wake of publishing a trading and strategy update he said: “We have launched a strategic plan for the business covering the next five years, and that is all about how we want to grow organically, but acquisitions are not off the agenda. 

"I suspect the consolidation we are seeing in the market will continue, and that we would likely be part of that. In terms of organic growth, we want to attract more investment managers to us, there is a lot of talent out there.”  

Rathbones has been an active participant in the recent wave of consolidation in the market, negotiating to buy Smith and Williamson before that deal collapsed, and then acquiring the Scottish firm Speirs and Jeffrey. 

Mr Stockton added he hoped to grow the level of business it does with advisers in the years ahead after launching an app and other technological features he believes will make advisers' lives easier.

He said: “Rathbones is well positioned in the adviser market, and recently we have grown our relationships with some of the networks and the nationals, but we want to leverage those relationships, and that includes investing in our digital capabilities, including an app.”

The company’s strategic review document, seen by FTAdviser, said Rathbones’ intention over the coming years was to “create a tailored digital journey” for advisers, allowing them to access Rathbone products in a way that is convenient.

The document indicated the firm believed that ease of use for advisers will be a key determinant of where they place their business in future. 

The company had total funds under management and administration of £49.4bn at the end of September 2019, an increase of 4.4 per cent on the same period a year ago. 

Of that £42.4bn was in the wealth management business, and £7bn in Rathbone Unit Trust Management, which is a fund management business.

Total net inflows across the unit trust business were £100m, with the increase driven by the funds business, which had inflows of £300m, meaning outflows for the investment management business were £200m in three months. 

Of the £7bn of assets in the unit trust business, almost half are managed by two managers, with James Thomson’s Rathbone Global Opportunities fund accounting for £1.7bn of the total, and Bryn Jones's Ethical Bond fund and Strategic Bond fund accounting for £1.5bn of the total.

Mr Stockton said: “Certainly we want to diversify more, we have launched new funds lately.” 

The firm’s underlying profit for the three-month period was £86.3m, an increase of 7.5 per cent on the same period in 2018, with the increase largely coming from the investment management business.

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