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Schroders' Assets Under Management Decline

Amanda Cheesley

31 July 2023

assets under management reached £726 billion ($932 billion) in the first half of 2023, down from £773 billion in the same period last year, partly due to volatile markets.

The firm's operating profit reached £341 million in the first half of the year, falling from £407 million in the same period in 2022. Pre-tax profit reached £276 million, from £313 million in 2022. Net operating income totalled £1,212 million, down from £1,240 in the first half of 2022, the firm said in a statement yesterday. 

The wealth and investment management business said its strategic rebalancing towards higher growth and increased longevity areas enabled it to deliver overall net new business of £5.7 billion, excluding joint ventures and associates. The firm’s three strategic growth areas of wealth management, private assets and solutions generated combined net new business of £11.8 billion.

Wealth management
Wealth management delivered net new business (NBB) growth in the first half of the year, with an annualised advised NNB growth rate of 8 per cent, the firm said. Total NNB was £3.7 billion, compared with £3.8 billion in the same period of 2022, made up of £2.4 billion of advised, £400 million of platform and £900 million of managed NNB.

Net operating income increased by 7 per cent to £215.9 million, compared with £202.5 million in the same period last year, driven by continued strong NNB growth and higher net banking interest. Operating profit reached £75.9 million, compared with £77.9 million in the first half of 2022, the firm continued.

Assets under management in Schroders Personal Wealth (SPW), its joint venture with Lloyds Banking Group, ended the period at £13.7 billion, compared with £13.3 billion in 2022, with net inflows of £200 million. Wealth management AuM increased by 4 per cent over the first half of 2023, ending the period at £116.3 billion, compared with £111.4 billion in 2022. This comprised £75.2 billion of advised AuM, £17.9 billion of platform AuM and £23.2 billion of managed AuM, the firm said. On the current trajectory, the firm sees a promising NNB growth rate at the higher end of its 5 to 7 per cent target for the full year.

“We are pleased with the positive progress in wealth management and solutions, which performed well during the turbulent period in the UK government bond market. Even with the uncertain market conditions, we experienced positive net new business in European and US mutual funds,” Peter Harrison, group chief executive, said.

“Our key performance indicator, three-year investment performance, remains strong with 77 per cent of client assets outperforming their relevant comparator, while 73 per cent outperformed over five years,” Schroders concluded.

The firm has maintained its interim dividend of 6.5 pence per share.