Charles Stanley has warned that pre-tax profits at the group could miss expectations by over 10%.
In a pre-close trading update, the group said profits would be lower than expected due to post RDR consultancy work and other 'exceptional professional fees' that have increased one-off costs during the 12 months to the end of March. Charles Stanley also said costs associated with enhancements to its middle office including risk management head count and additional IT systems expenditure had eaten into profitability.
Nonetheless, total assets under management and administration at 31 March had reached a new high of £20.1 billion, up 13.5% from £17.7 billion in 2013, compared to a 2.6% rise by the WMA Balanced Index. Charles Stanley noted particular growth in managed funds of 20.4% to £11.2 billion over the year.
Charles Stanley Direct now has over 15,000 clients and new funds of over £200 million. 'Whilst it is still very early days, we are pleased with progress,' the group noted.
The private client group, led by Sir David Howard (pictured) said its new Leicester branch, which has sparked a High Court battle with rival Brewin Dolphin over the recruitment of six of its staff, had brought in additional assets. Costs relating to the new office during the year amounted to £2 million, which does not include potential legal costs relating to the High Court dispute.