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The twists and turns in Rathbones’ five-year journey

Rathbones has transformed its business since the depths of the recession in 2009.

Five years, four acquisitions and a 139.3% share price rise mark the end of a fascinating five-year period for Rathbone Investment Management. Chief executive Philip Howell is now in the driving seat after Andy Pomfret ended a 15-year stint at the firm in March.

After a double buy of Jupiter’s private client business and the Tilney London team, just one month into Howell’s new role, one senses another interesting five years is ahead for the company.
Assets under management have doubled over the five-year period, now standing at over £22 billion, while profits have rocketed at the same time.

Rathbones has experienced some lows during that time, however, with a 41% year-on-year profit fall in July 2009 as it emerged from the credit crunch and a £3.6 million Financial Services Compensation Scheme (FSCS) bill in 2010 due to industry failures, such as Keydata.

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July 2009 - 41% profit hit

Rathbone blames difficult market conditions for a 41% pre-tax profit fall over the six months to June, profit stands at £14.1 million and assets at £9.7 billion.

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September-October 2009 - Rathbones snaps up Lloyds’ wealth division

The company buys Lloyds’ private client portfolio management services for a sum of up to £35.4 million, dependent on asset transfer. Rathbones also gained exclusive distribution rights to manage money for Lloyds' sub-£2m clients.

During September Rathbones also positioned the business for the retail distribution review by launching an official discretionary service for advisers.

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January 2011 – FSCS levy woes

Rathbones faces an interim levy of £3.6 million for the year to the end of December 2010 as a result of the failures of Keydata and Wills & Co.

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February, March 2011 – Fee hike and Keydata campaign

Rathbones raises its fees for the first time in five years, blaming a greater regulatory burden, with the introduction of a £120 annual charge on every account above £15,000 and applies a transaction charge of £20, £10 on UK equities and unit trusts, on all trades.

In February the group also joined with eight other wealth firms to demand an independent inquiry into the collapse of Keydata after it sparked steep FSCS interim levy bills.

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April 2011 – FSCS resubmissions

Rathbones is among the wealth and fund management companies that resubmit annual eligible income figures used to calculate the FSCS’s £326 million interim 2010/2011 levy.

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October 2012 – AIB Jersey acquisition and stake in Cornish adviser

The acquisition of the investment business of Channel Islands-based AIB Jersey brings in around £43 million in assets. Over the same month Rathbones also buys a stake in south-westerly adviser firm Vision Independent Financial Planning and its sister company Castle Investment Solutions to benefit from ‘disenfranchised’ clients of high street banks.

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November 2012 - Rathbones acquires Taylor Young IM

In a deal which aimed to bring around £335 million assets over, Rathbones said it expected to pay up to £10 million for the business. At the time, Rathbones said it would raise an additional £24.2 million to fund further buys.

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Feb 2013 - FSCS bill soars to seven figures, Newcastle office opens

The firm reveals its FSCS bill rose to £1 million in 2012 due to industry failures and levy restatement exercises. The figures was around £600,000 higher than 2011.

In the same month, Rathbones launched a Newcastle branch, spearheaded by a former UBS team.

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May 2013 - Rathbones and Quilter Cheviot develop Total Account Cost calculation

Rathbones and Quilter Cheviot announce they are joining forces to develop a framework for investment managers to estimate the total costs of running discretionary portfolios.

Rathbones' head of investment management Paul Chavasse (pictured left) launched the initiative alongside Quilter Cheviot executive director Pamela Reid (pictured right) following a Wealth Manager article in the topic in 2012.

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Feb 2014 – Pomfret signs off, Howell steps into the driving seat

Chief executive Andy Pomfret (pictured right) signs off after a 15-year stint at the firm with 15% profit growth in his final year in charge to £44.2 million in 2013, with assets under management of £22 billion.

He handed over to Philip Howell (pictured left) in March.

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April 2014 – £24m raised for Jupiter and Deutsche buys

Rathbones does a share placing to fund a double buy of Jupiter’s private client and charity business, and the former Tilney London business from Deutsche. Rathbones paid £43.5 million for Jupiter and £14.3 million for Deutsche’s London team.

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