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It was ‘fascinating’: Rathbones chief signs off with 15% profit jump

It was ‘fascinating’: Rathbones chief signs off with 15% profit jump

Rathbone Brothers’ chief executive Andy Pomfret delivered a 15% profit growth in his final year in charge.

Pomfret (pictured), who described his 15 years at the investment manager as ‘fascinating’, will be replaced by Phillip Howell on 1 March.

Performance in 2013 showed profit in Rathbones' wealth management business rose from £38.5 million in 2012 to £44.2 million last year, with net operating income 12.7% higher at £165.3 million.

The firm attracted some 1,500 clients over the year which came through three channels; direct, financial intermediaries and new investment managers joining the team.  

Meanwhile, the firm’s unit trust business saw positive net monthly inflows sales throughout 2013, helping the arm increase profit from £0.6 million to £1.4 million over the year.

Total funds under management in the wealth management business rose 22.2% to £22 billion, while the funds business saw assets swell from £1.3 billion to £1.8 billion.  

The numbers prompted Rathbones to raise its dividend by 4.3% to total of 49p, an increase of 4.3% on the previous year.  

Pomfret's time in charge has seen major growth in the business.

‘I joined the group in 1999 as the finance director, taking over as chief executive at the end of 2004. This has been a fascinating and challenging period, characterised by unstable markets. Over this period the business has grown from £5 billion of funds under management to over £22 billion,’ Pomfret told the market.

‘This achievement is entirely down to the people who work for Rathbones, and I will miss them all as I move to a plural career. Philip Howell will take on the role of chief executive a year after he joined as my deputy. Having spent the last year working with Philip I believe he is the ideal person to lead Rathbones in the future. ‘

Following a spate of acquisitions recently, including Taylor Young Investment Management, Rathbones chairman Mark Nicholls indicated Howell would be given more money to spend on buys.

‘We are well placed to take advantage of future growth opportunities in our sector and continue to look to the future with optimism,’ Nicholls said.

Earlier this month Wealth Manager revealed that Rathbones was among the firms considering launching a bid for Jupiter's wealth arm.

Regulation threat

With regulation an increasingly important issue for private client managers, Nicholls said the group plans to improve its risk controls.

‘Whilst we have made considerable progress in 2013, risk management remains an area we want to develop further,' he said. 

'We plan to establish an independent risk management structure to supplement our historic and proven practice of ensuring that our investment teams take responsibility for the risks in their areas of business. We will continue to promote a culture of risk awareness and responsibility throughout the firm.'

Nicholls believes the biggest risks to Rathbones growth strategy is continued regulatory intervention in the sector.

‘We believe that it is important that short term political imperatives do not mean that the pendulum swings too far in our area of financial services and that unintended consequences do not work against the best interests of good investment managers and their clients, he said.  

At 9.25am shares in Rathbones were 15p lighter at £17.70.

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