8th May 2025 07:00
Rathbones Group Plc
first QUARTER TRADING UPDATE
Rathbones Group Plc ("Rathbones" or the "Group") announces a trading update for the three months ended 31 March 2025
Paul Stockton, Group Chief Executive Officer of Rathbones, said:
"Rathbones reached a major milestone in April 2025, successfully migrating 90% of Investec Wealth & Investment (IW&I) client accounts onto the Rathbones platform. This marks significant progress in the integration of IW&I and, while there is still work to do, the Group remains on track to complete the migration of remaining clients by the end of the second quarter as planned.
In a quarter that witnessed some considerable market turbulence, the Group saw net outflows, primarily due to a lower level of gross inflows as the final stages of the migration process impacted IW&I in particular. Rathbones Asset Management's single strategy funds and multi-asset funds saw elevated outflows as a result of ongoing market volatility. This reflected the broader industry trend of weaker flows into equity, fixed interest and multi-asset funds, with flows leaning more towards money-market funds in the quarter.
Market volatility reinforces the enduring value of long-term, relationship-led wealth management, and creates opportunities for asset managers, but sustained volatility can also impact revenue and profitability. Wealth management FUMA valuations and fee income calculations at the end of the quarter coincided with a moment of particular market weakness. This heightens the need for our ongoing cost discipline, and whilst we continue to invest to support growth opportunities and deliver synergy benefits, we will be looking to manage operational cost levels actively to mitigate these effects on profitability as much as possible.
The foundations for future growth are strong, and I look forward to welcoming Jonathan Sorrell when he joins us in July, securing a smooth leadership transition that continues to support our clients and colleagues as we look towards the next chapter for the Group."
Financial highlights:
- FUMA declined 4.7% to £104.1 billion at the quarter end (31 December 2024: £109.2 billion). This comprised Rathbones Investment Management (RIM) FUMA at 4 April and FUMA for the remainder of the Group at 31 March and reflected market volatility.
- £88.7 billion in the Wealth Management segment (31 December 2024: £93.4 billion).
- £15.4 billion in the Asset Management segment (31 December 2024: £15.8 billion).
- Over 50% of Wealth Management fees were billed on 4 April, when markets had fallen approximately 4.6% since 31 March.
- Gross inflows totalled £2.7 billion in the first quarter (Q4 2024: £3.2 billion), reflecting the impact of the focus on migration activity, which was at its peak during the quarter. Outflows totalled £3.5 billion (Q4 2024: £3.4 billion) in the period.
- Net inflows in RIM discretionary & managed propositions remained positive in the first quarter at £62 million, (Q4 2024: £395 million), representing an annualised growth rate of 0.4% for the quarter. Outflows included a large lower margin account.
- Net outflows in Investec Wealth & Investment UK (IW&I) remained consistent at £425 million (Q4 2024: net outflows of £409 million), as the reduction in gross inflows was offset by a reduction in IW&I's gross outflows of 15.5% relative to Q4 2024.
- Single strategy funds within the Asset Management segment, which was already facing a challenging market for active managers, were further affected by recent market turmoil, resulting in net outflows of £265 million in the first quarter (Q4 2024: outflows of £98 million). This was despite performance in our largest funds remaining in the first or second quartile across 1, 3 and 5 years.
- Despite the challenging market backdrop, the Group's total operating income remained resilient, totalling £220.1 million for the quarter (Q1 2024: £223.6 million). While there was a decline in fee-based income, this was primarily driven by market volatility at the time of client billing. As anticipated, transaction-based commission income in March 2025 was notably flatter than normal, reflecting a more muted seasonal spike due to the higher level of client portfolio activity that arose ahead of the 2024 Autumn Budget. Net interest income grew modestly; however, income for the first quarter does not reflect the contribution from IW&I interest income relating to client money deposits, which remained within other income for Q1 and will be recognised as net interest income, along with the related revenue synergy disclosed previously, from the point of migration of client assets in Q2.
- Synergy delivery has increased to £30.4 million per annum on an annualised run-rate basis, with the majority of the remaining cost synergies expected to materialise in H2, following the completion of the migration in H1.
AGM and Interim results dates:
Annual General Meeting
The Annual General Meeting (AGM) will be held today, 8 May, at 9:00am at our London head office at 30 Gresham Street, London, EC2V 7QN. Similar to last year, the Board has made arrangements to enable members to attend and participate in the meeting electronically should they wish to do so. Instructions on how to attend and participate electronically are set out in the Notice of AGM.
Interim results
The interim results for the six months to 30 June 2025 will be announced on 30 July 2025.
Detailed financial information:
Net Operating Income
3 months ended 31 March | |||
2025 | 2024 | Change | |
Wealth Management | (£m) | (£m) | (%) |
- Fees | 137.1 | 141.2 | (2.9) |
- Commissions | 24.3 | 25.0 | (2.8) |
- Net interest income | 16.1 | 15.9 | 1.3 |
- Fees from advisory services | 14.7 | 14.4 | 2.1 |
- Other income1 | 6.9 | 7.5 | (8.0) |
199.1 | 204.0 | (2.4) | |
Asset Management | 21.0 | 19.6 | 7.1 |
Net operating income | 220.1 | 223.6 | (1.6) |
MSCI PIMFA Private Investor Balanced Index on 31 March2 | 1,908 | 1,866 | 2.3 |
MSCI PIMFA Private Investor Balanced Index on 4 April2 | 1,821 | 1,853 | (1.7) |
1. Including interest income on client money deposits of £6.3 million (Q1 2024: £6.6 million) mainly relating to IW&I.
2. IW&I billed first quarter fees on 31 March 2025 (2024 fees were billed on 29 February when the MSCI PIMFA Private Investor Balanced Index was 1,815). The principal billing date for RIM clients for the quarter was at the close of business on 4 April 2025 (2024: 5 April). The charging dates for the remaining quarters of 2025 are now aligned. Rathbones Asset Management (RAM) calculates its charges on a daily basis and FUMA is shown as at 31 March.
Funds under management and administration
(I) Segment fuma
Quarter ended 31 March & 4 April 2025 | Wealth Management(£m) | Asset Management (£m) | Intra-group holdings (£m) | Group FUMA(£m) |
Opening FUMA | 99,309 | 15,751 | (5,896) | 109,164 |
Gross Inflows | 2,252 | 826 | (354) | 2,724 |
Gross Outflows | (2,720) | (1,050) | 262 | (3,508) |
Net Flows | (468) | (224) | (92) | (784) |
Market & Investment Performance | (4,354) | (137) | 163 | (4,328) |
Closing FUMA | 94,487 | 15,390 | (5,825) | 104,052 |
(Ii) Breakdown of FUMA and flows by service level
Quarter ended 31 March & 4 April 2025 | Opening FUMA(£m) | Gross Inflows (£m) | Gross Outflows (£m) | Net Flows(£m) | Transfers3(£m) | IW&I Migrated Assets (£m) | Market & Investment Performance (£m) | Closing FUMA(£m) | Ann Net Growth4(%) |
Rathbones Investment Management | 52,900 | 1,470 | (1,357) | 113 | 19 | 222 | (3,090) | 50,164 | 0.9 |
Bespoke portfolios | 47,801 | 1,285 | (1,240) | 45 | (73) | 222 | (2,961) | 45,034 | 0.4 |
Managed via in-house funds | 5,099 | 185 | (117) | 68 | 92 | - | (129) | 5,130 | 5.3 |
Multi-asset funds5 | 3,093 | 158 | (209) | (51) | - | - | 83 | 3,125 | (6.6) |
Rathbones discretionary & managed | 55,993 | 1,628 | (1,566) | 62 | 19 | 222 | (3,007) | 53,289 | 0.4 |
Non-discretionary service | 666 | 5 | (6) | (1) | (25) | 16 | (30) | 626 | (0.6) |
IW&I | 42,973 | 692 | (1,117) | (425) | - | (253) | (1,036) | 41,259 | (4.0) |
Single-strategy funds | 6,762 | 314 | (579) | (265) | - | - | (57) | 6,440 | (15.7) |
Execution only | 2,770 | 85 | (240) | (155) | 6 | 15 | (198) | 2,438 | (22.4) |
Total Group | 109,164 | 2,724 | (3,508) | (784) | - | - | (4,328) | 104,052 | (2.9) |
(iiI) Breakdown of WEALTH Management FUMA and flows by channel
Quarter ended 31 March & 4 April 2025 | Opening FUMA(£m) |
Gross Inflows (£m) |
Gross Outflows (£m) | Net Flows(£m) | Transfers3(£m) | IW&I Migrated Assets (£m) | Market & Investment Performance (£m) | Closing FUMA(£m) | Ann Net Growth4(%) |
Total direct | 35,933 | 936 | (966) | (30) | 24 | 221 | (2,158) | 33,990 | (0.3) |
Total financial adviser linked | 16,967 | 534 | (391) | 143 | (5) | 1 | (932) | 16,174 | 3.4 |
Total discretionary service | 52,900 | 1,470 | (1,357) | 113 | 19 | 222 | (3,090) | 50,164 | 0.9 |
Execution only | 2,770 | 85 | (240) | (155) | 6 | 15 | (198) | 2,438 | (22.4) |
Non-discretionary service | 666 | 5 | (6) | (1) | (25) | 16 | (30) | 626 | (0.6) |
Total wealth management | 56,336 | 1,560 | (1,603) | (43) | - | 253 | (3,318) | 53,228 | (0.3) |
IW&I | 42,973 | 692 | (1,117) | (425) | - | (253) | (1,036) | 41,259 | (4.0) |
Total wealth management for enlarged Group | 99,309 | 2,252 | (2,720) | (468) | - | - | (4,354) | 94,487 | (1.9) |
(iV) Total Group FUMA
Quarter ended 31 March & 4 April 2025 | Opening FUMA(£m) | Gross Inflows (£m) | Gross Outflows (£m) | Net Flows(£m) | Transfers3 (£m) | IW&I Migrated Assets (£m) | Market & Investment Performance (£m) | Closing FUMA(£m) | Ann Net Growth4(%) |
Rathbones Investment Management | 56,336 | 1,560 | (1,603) | (43) | - | 253 | (3,318) | 53,228 | (0.3) |
Rathbones Asset Management | 15,751 | 826 | (1,050) | (224) | - | - | (137) | 15,390 | (5.7) |
IW&I | 42,973 | 692 | (1,117) | (425) | - | (253) | (1,036) | 41,259 | (4.0) |
Total | 115,060 | 3,078 | (3,770) | (692) | - | - | (4,491) | 109,877 | (2.4) |
Group eliminations6 | (5,896) | (354) | 262 | (92) | - | - | 163 | (5,825) | 6.2 |
Total | 109,164 | 2,724 | (3,508) | (784) | - | - | (4,328) | 104,052 | (2.9) |
3. Transfers represent client FUMA which has transferred from one service to another and other intra-group movements. These are excluded from net inflows.
4. Annualised net growth calculated as net flows/opening FUMA.
5. Net inflows into multi-asset funds include direct flows and flows into managed solutions delivered using in-house funds.
6. Group eliminations represent RAM funds that are held within portfolios managed by RIM (£5.6 billion) and IW&I (£0.3 billion) teams. Consequently, after excluding the RAM funds, the FUMA of each entity is £47.6 billion in RIM and £41.0 billion within IW&I.
8 May 2025
For further information contact:
Investors Paul Stockton, Group Chief Executive OfficerIain Hooley, Group Chief Financial OfficerShelly Patel, Head of Investor Relations
Tel: 020 7399 0071Email: [email protected]
Press Tessa Curtis, Director of Corporate Communications & Affairs
Tel: 07833 346238Email: [email protected]
Camarco Ed Gascoigne-Pees
Tel: 020 3757 4984Email: [email protected]
Rathbones Group Plc
Rathbones is a leading provider of individual Wealth Management, Asset Management and related services to Private Clients, Charities, Trustees and Professional Partners. We have been trusted for generations to manage and preserve our clients' wealth. Our tradition of thinking, acting and investing for everyone's tomorrow has been with us from the beginning and continues to lead us forward.
Rathbones headquarters is 30 Gresham Street, London, EC2V 7QN.
www.rathbones.com
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