Rathbone Brothers slows in wake of FTSE stock weakness

Michael Bow
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Rathbone Brothers is the biggest wealth manager in the UK behind rival St James’s Place

Wealth manager Rathbone Brothers hiked its full-year dividend yesterday despite a slowdown in underlying sales growth last year.

The FTSE 250 firm, the biggest wealth manager in the UK behind rival St James’s Place, said the underlying rate of organic growth fell to four per cent during 2014, compared with 5.4 per cent in the prior year.
The 273-year-old business delivered a 33p dividend for the quarter, helping take the full-year total to 52p a share – up from 49p last year.
Chairman Mark Nicholls said it was a “challenging year” for markets.
The FTSE 100 fell by 2.7 per cent over the period, hampering Rathbones’ sales efforts to lure customers to put more money into stocks and bonds.

Customers plowed more cash into funds last year than the prior year – £2.3bn versus £2.1bn in 2013 – but pulled £1.5bn overall, slightly higher than the prior year.
Overall assets under management rose to £24.7bn from £20.2bn thanks to £3.2bn more from the group’s acquisition of Jupiter’s private client business and parts of Deutsche Asset & Wealth Management.
The firm still managed to add 5,000 more customers to its ranks though, taking the total to 46,000.
After the results, analysts at Cana­c­cord Genuity removed their “buy” rating on the stock, citing higher anti­cipated investment by the firm in its infrastructure. It now has a “hold” rating with a 2,310p target price. Shares in the business dipped 1.1 per cent to finish the day down 25p at 2,196p.