Rathbones lowers fourth quarter margin view as deals with FCA review

Rathbones Group PLC on Wednesday reduced underlying operating margin guidance as it weighs the impact of the skilled person review, announced in June.

The London-based investment and wealth manager said pretax profit rose 16% to £72.1 million in the six months ended June 30 from £62.3 million the year prior.

Operating income grew 8.6% to £487.5 million from £449.1 million and underlying operating margin improved to 25.3% from 24.0%.

Basic earnings per share increased to 50.4 pence from 42.6p. The dividend was hiked by 3.2% to 32.0p per share from 31.0p.

"The first half of 2026 has been demanding, but it has also demonstrated what Rathbones is capable of," said Chief Executive Jonathan Sorrell, pointing to an increase in funds under management and profit.

Funds under management and administration increased by 11% year on year to £120.7 billion as at June 30 from £109.0 billion the year prior.

Wealth Management recorded net inflows of £400 million in the quarter, with Discretionary & Managed net inflows of £500 million. Asset Management net outflows of £400 million were similar to the first quarter, reflecting continuing industry-wide pressure on active equity strategies, Rathbones said.

Overall, net flows for the quarter were flat overall, whilst net outflows for the first half of 2026 were £900,000.

Rathbones said the second half will be affected by the cost of the actions announced in June in relation to the skilled person review.

These actions include the cessation of charging fees on the cash element of portfolios, which the firm continues to expect will reduce income and operating profit by around £9m over the six month period.

The probe by the UK Financial Conduct Authority saw Rathbones in June voluntarily halt new inflows from some existing high-risk clients until they "meet certain requirements".

In addition, Rathbones expects the changes to reduce the underlying operating margin for the second half of the year by 1.3 percentage points. As a result, the fourth quarter operating margin target has been cut to 28.7% from 30.0%.

Shares in Rathbones fell 2.0% to 1,684.24p each in London on Wednesday.

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