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Jupiter ‘happy’ at bumper £5 million FSCS refund

by Dylan Lobo on Feb 28, 2013 at 11:37

Jupiter ‘happy’ at bumper £5 million FSCS refund

Jupiter Fund Management is 'happy' with the £5 million rebate it has received from the Financial Services Compensation Scheme (FSCS).  

Jupiter had originally paid £5.2 million into the scheme in 2010 to compensate investors who had lost out from the failure of a number of financial institutions, including Keydata.

The FSCS subsequently opted to refund fund managers ahead of advisers on any recoveries it made from Keydata.

‘This is a better outcome than we hoped for,’ Jupiter chief financial officer Philip Johnson told Wealth Manager.  ‘We have been working with the FSCS hard on what rate we should pay and we are very happy with this outcome.’

Dividend hike

The news was revealed in Jupiter’s full year numbers in which it increased its dividend by 13% to 8.8p.

The FSCS rebate, along with a reduction in financial expenses, helped profitability jump from £70.3 million to £73.6 million.

Meanwhile, assets under management rose from £22.8 billion to £26.3 billion and inflows edged up from £0.7 million to £ 1 billion.

However, total net revenue fell from £248.5 million to £244.5 million due to declines in performance fees and initial charges. The UK accounted for the bulk of this revenue at £225 million, while continental Europe dipped from £18.3 million to £14.7 million.

In the run up the results, brokers had expressed concern on the impact of the retail distribution review (RDR) on the firm given its high exposure to the UK.

Bank of America Merrill Lynch expressed this concern in a note published at the end of January. ‘Given the uncertainty around RDR we are forecasting a slowdown in the group’s inflows,’ the note said.

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2 comments so far. Why not have your say?

Jonathan Kirby

Feb 28, 2013 at 14:35

I am so glad to have contributed to Jupiter's increased profits through the levy.

As someone who never recommended Key Data it seems very odd that this money should go to the shareholders of Jupiter a company who can obviously afford their levy far more easily than we can.

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Adam Smith

Mar 01, 2013 at 08:59

Given Jupiter & other fund managers helped subsidise advisers' FSCS liabilities (and that's still true, even post-refund), I don't see there's much to complain about in this story

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