A hot week in every sense as we saw encouraging results, updates and disposals in the sector:
To a large extent the return to profit at Charles Stanley is a result of shedding staff while marginally increasing AUM – the departing staff took only a modest number of clients with them – although the windfall profit on selling the lease of its old head office in Luke Street more than covered the cost of moving its five offices into one new building (pity they didn’t have more low-rent leases to sell!). Other significant drivers were the continuing switch of advisory clients to the less costly (for the firm) discretionary service and the “reconstruction” of the asset management and financial planning divisions.
The good news at Brewin Dolphin is not just a significant uplift in profit (adjusted pbt +14%, statutory pbt + 32%) as the effect of increased fees and staff cuts work through but that AUM actually increased faster than the market in the six months to end-March. This was largely thanks to the growth in the lower-cost Managed Portfolio Service that it provides to IFAs and their clients, although the past shrinkage of their (formerly vast) pool of advisory clients means that further losses now have little impact.
The long-awaited upturn in small/mid-cap corporate finance has reached WH Ireland ahead of rivals such as Numis or Arden and (since corporate finance profits are highly geared to revenue) they expect interim results to be significantly better than last year’s. The private wealth management division has also done well increasing AUM to over £3 billion. Wealth Planning, which overlaps with private offices at the top end and IFAs at the bottom, is stated to have had a particularly strong first half.
Randall & Quilter has been busy recently with a series of transactions – mostly in the USA – to acquire portfolios in run-off that it can manage far cheaper (and better) – alternatively cheaper and far better – than the seller. They have also today announced the sale of R&Q Managing Agency to Coverys, who are based in Boston MA and a leading player in medical professional liability insurance. The transaction is subject to approval by Lloyd’s and the PRA, which should be decided upon in this calendar year. Coverys would then pay $22.6m, leaving R &Q with an estimated £13.9m once costs and incentive payments are taken into account.