Rough ride for Charles Stanley as fees tumble and costs rise

WEALTH manager Charles Stanley cautioned today over sliding fees and a costs spike linked to new regulations biting next year, sending shares off the pace.

Commission income, worth a third of Stanley’s revenue, has dropped over the past three months after it scrapped dealing commissions for well-heeled customers and moved them to fixed fees instead.

An additional £900,000 of costs linked to IT upgrades to get the business ready for new EU regulations next year also weighed on the outlook. Shares fell 5% to 365p despite higher profits for the previous six months.

Markets took fright at chief executive Paul Abberley’s warning that higher levels of trading activity or other revenue increases are needed over the next six months to hit expectations.

Moving away from often-lumpy commission fees should mean it can predict future earnings more accurately but in the meantime commission income was hit, down £1.1 million for the six months ending September against last year. The firm is aiming to become the leading wealth manager by 2020 and Abberley said: “It’s heading in the right direction.”

Adjusted pre-tax profits rose to £5.4 million from £4.2 million and the dividend was hiked by 1p to 2.5p. Assets at the group, founded 1792, also rose again to £24.3 billion, putting on £300 million from last year.

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