Boss of Charles Stanley blasts Keydata levy
SHARES in stockbroker Charles Stanley jumped 7.3 per cent yesterday after it unveiled a 29 per cent hike in profits in the year to March.
The wealth manager’s adjusted pre-tax profit rose to £17.7m from £13.7m in 2010, beating market expectations by about seven per cent, while earnings per share of 28.4p rose from 21.2p in 2010.
However, it was hit with a £2.6m levy from the Financial Services Compensation Scheme to compensate investors for losses incurred when investment firms fail – most notably the collapse of financial product provider Keydata in 2009.
Its chairman Sir David Howard attacked the “unfairness” of the scheme in a statement, and called for better regulation of misbehaving firms and the products they sell.
“These appear to be rogue businesses, operating in areas of the industry unrelated to us, marketing products or services that should have been stopped at inception,” he said.
“We join with the many companies, professional bodies and trade associations that are calling for a high-level enquiry into how such a thing, on such a scale, could possibly have been allowed to happen.”
However, he praised the broker’s performance and outlined an optimistic outlook. “The future remains as uncertain as ever. But we are well placed to move forward. So my guarded feeling of confidence about the outlook remains undaunted,” he said.
Funds under management rose 13 per cent to £14.5bn, from £12.8bn in March 2010, while fee and commission income rose 21 per cent to £50m from £41.4m, as investment management fees increased by 18.9 per cent to £27m.