February 20, 2013 11:24 pm

Rathbone appoints Howell to aid expansion

Rathbone Brothers on Wednesday said it was seeking to make more acquisitions this year and that it has hired ex-Williams de Broë chief executive Philip Howell to help the wealth manager expand.

The FTSE 250-quoted company said Mr Howell would join Rathbones as deputy chief executive from early March.

Andy Pomfret, chief executive, said Mr Howell was “in some demand” and that it was a significant hire for the wealth manager, which is aiming to build on the acquisitions it made last year.

“We’re always looking at a number [of acquisition opportunities]. This moment is no exception. There are a couple of relatively small things we’re looking at,” he said on Wednesday, as the company reported its preliminary results for 2012.

Rathbones raised £24.7m through placing 2m new shares in November to help fund future acquisitions. At the same time as the placing it bought the private client business of Taylor Young Investment Management for £10m, which is expected to boost its funds under management by £350m.

On Wednesday Rathbones said its funds under management increased 13.4 per cent year-on-year in 2012, to £18bn. However, net organic growth in its investment management unit was much lower, at 3 per cent.

Mr Pomfret said this reflected “clients dipping into capital to fund a lifestyle”. “People can’t get the income they necessarily need from their portfolio or their pensions and they’re dipping into capital a little bit,” he said.

He said the lead-up to the Retail Distribution Review this year was also stifling organic growth. The rules, which came into effect in January, force financial advisers to take fees upfront from clients rather than earning commission from companies whose products they sell.

Mr Pomfret said new business coming through to it from financial advisers had dropped in the past few months, because the advisers were focused on preparing for RDR.

However, he said Rathbones would benefit from RDR in the longer term. “There will be a number of financial advisers that will introduce clients to us and I would hope and expect that to increase but it will take some time.”

“I think it’s still quite a slow burn,” he added.

Underlying pre-tax profit (excluding amortisation and office relocation costs) at Rathbones dipped 2.4 per cent to £45.1m, in the year ending December 31.

Stuart Duncan, an analyst at Peel Hunt, said Rathbones’ small bolt-on acquisitions were adding “useful” funds to the business.

He said the financial adviser community was still undergoing a “period of flux” since RDR was introduced, but that Rathbones would benefit from the new rules.

Rathbones raised its dividend 1p for the year to 47p per share.

Shares in Rathbones closed down 2.01 per cent to £14.11p.

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