Rathbones Faces Market Storms While City Grandees Celebrate in Style
May 9, 2025, 10:55 am
In the world of finance, fortunes can shift like sand in the wind. Rathbones Group, a prominent player in wealth management, recently felt the sting of market volatility. The first quarter of 2025 was a rough ride. The introduction of tariffs by the Trump administration sent shockwaves through the financial landscape. Rathbones reported a three percent dip in fee income, a direct consequence of this turmoil.
Assets under management took a hit, falling five percent by the end of March. Investors, wary of the turbulent waters, withdrew cash at alarming rates. New investments? They dried up like a desert. Rathbones lost £784 million in outflows, with the asset management arm bearing the brunt of the losses. The wealth management sector, however, suffered even more. It reported a staggering £4.4 billion loss in market performance, while the asset management side only saw a £137 million dip.
The bespoke portfolios, which represent less than half of Rathbones' total assets, accounted for nearly three-quarters of the market losses. It’s a classic case of a few bad apples spoiling the bunch. Net operating income across the group dipped by 1.6 percent, despite some growth in advisory fees.
In response to these challenges, City broker Peel Hunt slashed Rathbones' earnings forecasts by six percent. They lowered the stock price target from 2,225p to 2,100p. This is a stark reminder of how quickly the tides can turn in finance. Rathbones noted that most of its wealth management fees were billed on April 4, just two days after a significant market downturn.
RBC estimates suggest that Rathbones, alongside AJ Bell, has the lowest proportion of revenue tied to asset-based fees in the sector. This gives the group a slight cushion against performance dips. As a result, Rathbones' share price has only slipped 1.5 percent since the start of 2025, a far cry from the double-digit declines seen by other financial firms.
Peel Hunt analysts see a silver lining. They believe this year could be a turning point for Rathbones. The integration process from its merger with Investec is nearing completion, with over 90 percent of client migrations finished. The promise of £60 million in cost synergies looms on the horizon. Analysts are cautiously optimistic, suggesting that as market conditions improve, Rathbones could return to growth. Wealth management, they argue, continues to offer long-term strategic opportunities.
Meanwhile, in a different corner of the financial world, the City AM Awards unfolded in grand style. The event, held at Guildhall, was a spectacle of elegance and celebration. City grandees donned their finest attire, ready to toast achievements in the financial sector. Champagne flowed freely, and a sumptuous feast prepared by The Clink charity set the stage for a night of revelry.
The awards ceremony, hosted by the charismatic Oli Barrett, was a whirlwind of recognition and camaraderie. High-profile figures mingled, including former Bank of England chief economist Andy Haldane and entrepreneurs like John Caudwell. The atmosphere buzzed with excitement, as industry leaders gathered to celebrate their successes.
City AM editor Christian May opened the event with a humorous note, poking fun at absent nominees and the seating arrangements that placed non-doms near the exits. Haldane, the guest speaker, didn’t hold back, ribbing Bank of England governor Andrew Bailey and calling for a “Bailey-style slimming of UK regulations.” The night was not without its hiccups, but overall, it was a triumph of organization and celebration.
The juxtaposition of Rathbones' struggles and the City AM Awards highlights the dual nature of the financial world. On one hand, firms grapple with market volatility and investor uncertainty. On the other, industry leaders celebrate achievements and network in style.
As Rathbones navigates its challenges, the broader financial landscape remains a mixed bag. The City AM Awards remind us that while some may falter, others thrive. The financial sector is a dance of highs and lows, a constant ebb and flow.
In the coming months, all eyes will be on Rathbones. Will it weather the storm and emerge stronger? Or will the market's unpredictability continue to cast a shadow? Only time will tell. For now, the City grandees celebrate their victories, while Rathbones strategizes for a brighter future. The financial world is a stage, and the performance is far from over.
Assets under management took a hit, falling five percent by the end of March. Investors, wary of the turbulent waters, withdrew cash at alarming rates. New investments? They dried up like a desert. Rathbones lost £784 million in outflows, with the asset management arm bearing the brunt of the losses. The wealth management sector, however, suffered even more. It reported a staggering £4.4 billion loss in market performance, while the asset management side only saw a £137 million dip.
The bespoke portfolios, which represent less than half of Rathbones' total assets, accounted for nearly three-quarters of the market losses. It’s a classic case of a few bad apples spoiling the bunch. Net operating income across the group dipped by 1.6 percent, despite some growth in advisory fees.
In response to these challenges, City broker Peel Hunt slashed Rathbones' earnings forecasts by six percent. They lowered the stock price target from 2,225p to 2,100p. This is a stark reminder of how quickly the tides can turn in finance. Rathbones noted that most of its wealth management fees were billed on April 4, just two days after a significant market downturn.
RBC estimates suggest that Rathbones, alongside AJ Bell, has the lowest proportion of revenue tied to asset-based fees in the sector. This gives the group a slight cushion against performance dips. As a result, Rathbones' share price has only slipped 1.5 percent since the start of 2025, a far cry from the double-digit declines seen by other financial firms.
Peel Hunt analysts see a silver lining. They believe this year could be a turning point for Rathbones. The integration process from its merger with Investec is nearing completion, with over 90 percent of client migrations finished. The promise of £60 million in cost synergies looms on the horizon. Analysts are cautiously optimistic, suggesting that as market conditions improve, Rathbones could return to growth. Wealth management, they argue, continues to offer long-term strategic opportunities.
Meanwhile, in a different corner of the financial world, the City AM Awards unfolded in grand style. The event, held at Guildhall, was a spectacle of elegance and celebration. City grandees donned their finest attire, ready to toast achievements in the financial sector. Champagne flowed freely, and a sumptuous feast prepared by The Clink charity set the stage for a night of revelry.
The awards ceremony, hosted by the charismatic Oli Barrett, was a whirlwind of recognition and camaraderie. High-profile figures mingled, including former Bank of England chief economist Andy Haldane and entrepreneurs like John Caudwell. The atmosphere buzzed with excitement, as industry leaders gathered to celebrate their successes.
City AM editor Christian May opened the event with a humorous note, poking fun at absent nominees and the seating arrangements that placed non-doms near the exits. Haldane, the guest speaker, didn’t hold back, ribbing Bank of England governor Andrew Bailey and calling for a “Bailey-style slimming of UK regulations.” The night was not without its hiccups, but overall, it was a triumph of organization and celebration.
The juxtaposition of Rathbones' struggles and the City AM Awards highlights the dual nature of the financial world. On one hand, firms grapple with market volatility and investor uncertainty. On the other, industry leaders celebrate achievements and network in style.
As Rathbones navigates its challenges, the broader financial landscape remains a mixed bag. The City AM Awards remind us that while some may falter, others thrive. The financial sector is a dance of highs and lows, a constant ebb and flow.
In the coming months, all eyes will be on Rathbones. Will it weather the storm and emerge stronger? Or will the market's unpredictability continue to cast a shadow? Only time will tell. For now, the City grandees celebrate their victories, while Rathbones strategizes for a brighter future. The financial world is a stage, and the performance is far from over.