The London-listed company aims to become the UK's leading wealth manager by 2020.

Charles Stanley reported an 80 per cent year-on-year rise in pre-tax profit to £3.6 million ($4.5 million) for the six months ended 30 September 2016, as well as new pay arrangements for its investment managers.

Funds under management and administration reached £22.5 billion during the period, up 13 per cent from a year earlier. Overall revenues declined from £74.9 million to £68.8 million, largely due to sale activities at the beginning of the financial year. Its “core” business revenue fell less sharply from £70.8 million to £68.8 million.

Chief executive Paul Abberley said the company had completed the first stage of its turnaround strategy, having disposed of loss-making “non-core” businesses, strengthened its balance sheet and reviewed remuneration structures. 

Charles Stanley’s new pay arrangements include one scheme for investment managers, who represent around 90 per cent of the company’s fund pool, and one for self-employed associates. The schemes, which will come into force at the beginning of the next financial year, will be based on profit contribution rather than revenue for better alignment with the interests of shareholders. They seek to lower the ratio of compensation paid as a percentage of revenues, while still allowing investment managers the opportunity to increase their total compensation subject to profit contribution.

“As partial consideration for the employed investment managers agreeing to enter into less attractive contractual terms than previous, and in part to align their interests more fully with those of shareholders in achieving profitable growth for the group, a condition of the proposals is the making of certain share awards to such investment managers,” said Abberley.

“These will be for up to 5 per cent of the group's issued share capital and will be facilitated via a new employee share plan to be created for this purpose; the Charles Stanley Employed Investment Managers Share Plan.”

In other changes, Mike Lilwall has stepped down from the board to focus on private client investment management. Meanwhile, the company has appointed four individuals to complete the reorganisation of its asset management teams into a single asset management division.

Senior collectives analyst Ross Brookes, who joined  Charles Stanley in 2008, has been appointed head of collectives research, responsible for leading the team in producing fund analysis for clients. Adam Carruthers, an investment writer at the company, and Ben Johnson, previously a fund manager at Barclays Wealth, have been appointed as collectives analysts. Lastly, Pierre Micallef has been promoted from asset allocation strategist to multi-asset fund manager.