UK's Rathbones hits one-year low after it pauses some new client onboarding, inflows (updated)
UPDATE 3-UK's Rathbones hits one-year low after it pauses some new client onboarding, inflows Updates shares in lead paragraph
June 16 (Reuters) - Wealth manager Rathbones RAT.L said it will pause onboarding new clients who require enhanced due diligence for 12 months, after a review of its UK Wealth Management business identified areas for improvement, sending its shares down nearly 19% on Tuesday.
The skilled-person review followed engagement with Britain's Financial Conduct Authority. Key details and impacts include:
The group expects changes stemming from the review to cost about £60 million ($80 million), net of anticipated insurance recoveries.
Charges to be recognised as non-underlying expenses over the next two years, it said.
Rathbones will also voluntarily pause acceptance of inflows from some existing clients who require enhanced due diligence.
It expects a roughly £9 million hit to 2026 underlying profit before tax after it stops charging investment management fees on cash balances in clients' discretionary portfolios from July.
Rathbones' shares touched a more than one-year low of 1,590 pence and were down over 17% at 1428 GMT.
The firm said its dividend policy and planned share buyback programme are unaffected.
While the changes will absorb management time and add short-term costs, the group believes the process should support and accelerate delivery of its strategy, Peel Hunt analysts note.
In February, Rathbones reported fiscal 2025 profit above market expectations driven by higher assets under management. ($1 = 0.7467 pounds)
(Reporting by Prerna Bedi in Bengaluru. Editing by Janane Venkatraman and Mark Potter)
((Prerna.Bedi@thomsonreuters.com; +91 98052 24616;))