Fleming Family & Partners chief executive Mark Davies has warned the firm is ‘unlikely to see a significant growth in profitability in the short term,’ despite posting strong full-year results.
‘The pressure both on revenue and costs in the wealth management industry continue. Notwithstanding the recent rise in equity markets, it is unlikely that we will see a significant growth in underlying profitability in the short term,’ Davies said in his outlook for the wealth firm, which appointed Ian Marsh (pictured) from Credit Suisse to be its group head of asset management in 2011.
The wealth manager’s pre-tax profit grew by 37.5% in the year to the end of March, from £3.2 million a year earlier to £4.4 million, boosted by a ‘significant performance fee’ generated by the Russian Real Estate fund. Turnover rose £10 million to £49.3 million.
Meanwhile, assets under management and administration also grew slightly to £4 billion, up from £3.7 billion a year earlier.
‘From an investment point of view, the main challenge is how to risk manage our portfolios in an environment where traditional, safe haven assets are very expensive and likely to fall or lose capital value, which makes multi-asset investing a rather challenging game,’ Arthur Grigoryants, the group’s head of investments told Wealth Manager.
‘We definitely want to grow, but in the right way, through delivering a good service and good performance,’ he added.
Elsewhere, Funds Capital Management, the absolute return arm of the business, incurred a one-off closure cost after it shut its remaining European funds ‘against a backdrop of high volatility and lack of investor interest in those markets’.
Following a strategic review, the group decided to maintain its dividend at 0.5p per ordinary share, the same amount as last year, to reinvest some profit into developing the business.