Profits Fall At Schroders’ Wealth Arm

Amisha Mehta Deputy Editor London 4 November 2016

Profits Fall At Schroders’ Wealth Arm

The London-listed investment house saw its wealth management profitability decline despite a surge in assets under management.

Schroders’ wealth management arm saw its pre-tax profit dip 10 per cent year-on-year to £42.7 million ($53 million) in the nine months to 30 September 2016.

The division’s profit before tax and exceptional items, however, was up at £49.5 million, compared to £46.5 million in the corresponding period of 2015. Net operating revenue was £162.6 million versus £157.6 million a year earlier. Despite net outflows of £500 million, the unit’s assets under management rose 15 per cent year-on-year to £35.6 billion.

Pre-tax profit at Schroders’ asset management arm declined from £391.3 million to £386.8 million. Its net operating revenue for the first nine months was £1.07 billion, compared to £1.03 billion a year earlier. Performance fees were up from £12.7 million to £13.3 million.

For the company as a whole, pre-tax profit stood at £436.2 million at the end of September, up marginally from £438.9 million a year ago. Total assets under management increased 26 per cent to £375 billion.

“Our diversified business model generated £2.7 billion of net new business and assets under management increased to £375.0 billion. We have made progress against our strategic objectives, particularly in North America,” Schroders’ group chief executive, Peter Harrison, said in a statement.

The company also reported results for its group segment, which comprises central costs and returns on investment capital. For this, pre-tax profit in the first nine months was £6.7 million, compared to a pre-tax loss of £100,000 a year earlier.

Register for WealthBriefing today

Gain access to regular and exclusive research on the global wealth management sector along with the opportunity to attend industry events such as exclusive invites to Breakfast Briefings and Summits in the major wealth management centres and industry leading awards programmes