Rathbones reported a weak three months as assets dropped by 0.1 per cent thanks to investors pulling £561m from the wealth manager.
The wealth manager’s stock dropped by more than three per cent upon market open this morning following the publication of its quarterly results.
Withdrawals from the business were caused by a variety of factors, as the number of investors pulling money from Rathbones jumped, even as deposits remained stable.
The largest factor was outflows associated with Rathbones’ merger of Investec Wealth & Investment, which saw investors pull £251m over the quarter.
This was due to “historic investment manager departures and lower levels of inflows given the ongoing transition”, said Investec analysts Rahim Karim and Jens Ehrenberg.
“The company has highlighted that the client consent process has (understandably) impacted IW&I’s gross inflows,” added RBC analyst Ben Bathurst.
“The integration of Investec Wealth & Investment (IW&I) has progressed at pace throughout the summer, and we remain focused on actions that support the delivery of the financial goals we set ourselves at the outset,” said Paul Stockton, group CEO of Rathbones.
“Over 80 per cent of clients have been asked for their consent to move their accounts to Rathbones Investment Management from IW&I and response rates are very positive.”
Meanwhile, £147m of assets was pulled by Saunderson House clients which did not transfer assets to Rathbones following the transaction.
Overall, analysts were slightly negative on the results, other than Peel Hunt, which said it remained encouraged by the positive flows into the core business, even if the new acquisitions had struggled to adapt.
“The potential for taxation changes in the forthcoming Autumn budget has created a heightened opportunity for us to engage positively with our clients and Rathbones remains well positioned to support clients to make the decisions needed to achieve their financial goals,” added Stockton.