Charles Stanley reports second quarter revenue hit

Added 21st July 2016

Charles Stanley's second quarter numbers were hit by lower commission fees and disposals resulting from its redirected business the firm said on Thursday.

Charles Stanley reports second quarter revenue hit

The investment manager’s core business generated £33.8m, down 6.8% from £36.3m on a like-for-like basis compared with the same quarter the year prior. Charles Stanley stated a reduction in trail commission, commission on bargains and interest turn were to blame for the revenue hit.

Last year, Charles Stanley disposed of its securities and financial services businesses in an effort to concentrate on developing its core wealth management business. This restructuring played a part in the 12.5% dip in overall revenues (£33.8m), the firm reported.

Accordingly, the firm’s discretionary and execution only funds increased by 4.3% and 2.9% over the quarter, while advisory managed and advisory dealing fell by 3.8% and 5.9%, respectively.

Total revenue from Charles Stanley’s Investment Management Services arm was also lower by around 8% (£29.5m), despite generating higher revenue from its asset management and financial planning businesses.

Charles Stanley did see higher funds under management and administration (FUMA) throughout the period of £20.9bn, up 2.0% from the first quarter.

CEO, Paul Abberley, remarked the FUMA growth was encouraging given the amount of market uncertainty and volatility:

"Overall FuMA increased by 2.0% from the start of the financial year and we have increased discretionary funds 4.3% to £9.8 billion. This has been achieved against a backdrop of market uncertainty leading up to the EU referendum vote." 

He added: "Stewardship of our clients' assets is particularly important during uncertain times and we will continue to monitor carefully both the political and economic environment.  At the same time, we will pursue our strategy of focusing on clients, delivering a holistic wealth management service and improving our operating margins across all our divisions."

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