Charles Stanley is back in the black as the investment manager returns to profitability after rejigging its business

Lucy White
Charles Stanley's chief executive Paul Abberley has led the firm through its restructuring

Investment manager Charles Stanley will be popping open the champagne today as its year-end results revealed a return to profitability.

The historic firm, which has existed since 1792, last reported a profit in the year ending March 2014. In 2016 the business began to turn its fortunes around, minimising loss to £0.3m, and this year has accelerated that to generate an £8.8m profit before tax.

Read more: Charles Stanley’s £6m swing into the red

Charles Stanley's turnaround was prompted by a transformation programme, which has involved changing remuneration structures, disposing of non-core activities and broadening the services offered to clients.

“We're increasingly offering holistic wealth management, because the clients are asking for more than just investment management of their portfolios. There's a broader interest in financial planning advice, or pooled solutions, or doing it themselves,” said chief executive Paul Abberley.

The business now has four client-facing divisions, including the private client investment management group, a financial planning division, an asset management tranche for pooled funds and the Charles Stanley Direct online platform, which allows individuals to invest themselves.

Outlining its offering more clearly appears to have worked well, as the business has increased its funds under management and administration by more then 17 per cent to £24bn.

But Charles Stanley has also worked on its governance structure. Its incentive structures are now linked to standards of conduct, rather than being purely financial, and the firm drafted in a number of new faces for its executive committee to run the day-to-day business.

Read more: Charles Stanley shares soar as firm almost doubles reported profits and unveils new profit-focused pay scheme

Ben Money-Coutts was brought on board as chief financial officer from fund-of-funds manager Saltus Partners, and set out Charles Stanley's vision going forward.

“We have set ourselves a medium term target of achieving an operating margin of 15 per cent, by around 2020. This year it's 7.1 per cent in comparison to 3.1 per cent the year before,” he said.

With its total 2017 dividend increasing by 20 per cent to 6p per share, investors will be hoping this also continues to rise.

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