Shares in Quilter are up more than seven per cent this morning even after the wealth manager reported a fall in 2020 profit.
Profit before tax for the year ended 31 December 2020 came in at £168m, down from £182m the year before.
Quilter Investors saw net inflows drop 40 per cent from £500m to £300m which the company said was related to difficulties in attracting new business during the pandemic.
Assets under management and administration (AuMA) edged seven per cent higher to £117.8bn. However total fees for advice and wealth management fell three per cent over the year to £396m, although an increase in its advice fees from its acquired businesses helped boost its revenue to £117m.
Despite a difficult year chief executive Paul Feeney said he was “pleased” with the performance and Quilter “had not only come through the year well but also strategically and operationally stronger.”
Feeney said the integration of Lighthouse is “largely complete”. Last summer the Financial Conduct Authority (FCA) launched an investigation into Lighthouse advisers’ defined benefit transfer advice given to British Steel Pension Scheme members prior to the acquisition.
In August the wealth manager increased its provision for the advice to £29m as Feeney admitted not spotting the issue before the acquisition. Today it said that while the provision would stay at this level the redress bill could hit £36m.
Quilter said the final costs of redress would depend on market movements “and other parameters affecting the defined contribution scheme asset.”