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Rathbones' FSCS bill soars to seven figures

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Rathbones' FSCS bill soars to seven figures

Rathbone Brothers revealed its Financial Services Compensation Scheme (FSCS) bill rose sharply in 2012, contributing to a dip in profit over the year.  

The private client stockbroker paid £1 million to the scheme in 2012 on the back of large number of failures in the industry and levy restatement exercises. The figures was around £600,000 higher than 2011.

Rathbones has spearheaded a campaign for a fairer FSCS levy. Back in February 2011 its chief executive, Andy Pomfret (pictured), led a group of eight wealth management bosses who demanded an independent inquiry into the collapse of Keydata after facing steep FSCS interim levy bills.

In response to last year's sharp rise in costs, Rathbones told the market today: 'We have been involved in the consultation on how the FSCS is funded in the future and await the final outcome of this consultation process.'

Other highlights from the results included the hire former Williams de Broë chief executive Philip Howell.

Howell will join the discretionary firm as deputy chief executive next month. He left Williams de Broë in May last year following the acquisition of its parent, Evolution Group, by Investec.

Williams de Broë has since been rebranded Investec Wealth & Investment.

Rathbones chief executive Andy Pomfret said Howell’s ‘considerable experience will add to the strength and depth of our management team’.

Meanwhile the headline figures showed profit before tax of £45.1 million for 2012, a 2.4% drop from the £46.2 million reported in 2011. Funds under management rose 13.4% from £15.9 billion at the end of 2011 to £18.0 billion at the end of December.

The FTSE 100 rose 5.9% during that period, with Rathbones reporting a 6% net increase in assets.

This figure includes asset boosts from the acquisitions of investment managers RM Walkden & Co and AIB Jersey, and outflows due to the loss of mandates to run both the and investments for national advice firm Cavanagh Financial Management, now owned by Close Brothers Asset Management.

Pomfret said 2012 had presented ‘a demanding investment climate for both Rathbones and our clients’. Chairman Mark Nicholls added that the DFM was well-positioned to deal with the retail distribution review.

Investors saw the results as an opportunity to take profit from Rathbones. At 10.15am shares were 39p, or 2.7%, lower at £14.01, 71p below their 12-month high.

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