Rathbones reports strong H1 but warns of regulatory impact to future profits

Research costs to be taken by business

Rathbone Brothers reported strong profits for the first half of 2017, despite continued investment in the business, but warned the Financial Conduct Authority (FCA) Asset Management Market Study's final recommendations could have a "small negative" impact on future margins from its unit trust business.

The group saw overall underlying profit before tax increase 22.7% from £35.3m to £43.3m in the first six months of 2017, while profit before tax for the half year increased 16.7% from £22.8m to £26.6m, reflecting £15.8m of costs associated with the London office move. However, when noting future regulatory changes the results said: "We note the recommendations of the recent FCA Asset Management Market Report and the sequence of consultations prior to final implementation. While we broadly welcome the proposals, they will have an impact on margins of our unit trust business from 2018." ...