Despite total revenues being slightly higher than the previous year at London-listed Charles Stanley, its directors said they were “disappointed” by a 16.4 per cent fall in commission income.
Despite total revenues being slightly higher than the previous
year at London-listed wealth management and brokerage firm
Charles Stanley, its directors said they were “disappointed” by a
16.4 per cent fall in commission income in its latest interim
Charles Stanley said in an interim management statement that total revenue for the three months to 30 June increased slightly to £37.3 million ($63.5 million), up from £36.9 million for the same period a year ago.
The firm said that commission income which has been impacted by a drop in transaction volumes had decreased 16.4 per cent from June last year to £12.7 million.
“Total revenues remain stable but due to the cost of continuing investment in our future together with falling commission revenues, we approach the coming months with considerable caution,” the firm said.
This drop in commission income was offset by a 13.4 per cent rise
in fee income, up from £21.7 million last year to £24.6
million. Investment management fee income increased by 21.0
per cent, from £10.0 million to £12.1 million, reflecting changes
to the charging structure introduced last year.
Total client funds increased 0.2 per cent from the last quarter to £20.14 billion, while within this figure discretionary managed funds increased by 3.2 per cent from £8.2 billion to £8.5 billion, reflecting a net inflow of funds during the period.
Charles Stanley said that 2014 had been a year of “significant cost and investment” in the future and that investment will continue to have an effect on margins.
“In particular, profitability was impacted by the acquisition of teams of investment managers, the continuing roll-out of the direct-to-client web-based service Charles Stanley Direct, and a major programme of upgrading the quality of service of our principal business of discretionary and advisory investment management,” the firm said.
Over the past year, Charles Stanley has opened new offices in Leicester and Cardiff, and in December acquired Evercore Pan Asset Capital Management for a partly deferred payment of up to £2 million.
Charles Stanley has also made a number of new hires in the past 12 months. In April, the firm appointed Anthony Scott as head of investment management and earlier this year also appointed Simon Davis as director of wealth management in the company’s financial services division.