Rathbones Group (LSE:RAT) reported underlying profit before tax of £123.2 million for the six months to 30 June, up 14.4% on the £107.7 million recorded in the same period last year.
The UK wealth manager, which oversees £120.7 billion in client assets across discretionary investment management, financial planning and fund management, said operating income rose 8.6% to £487.5 million, driven by higher investment management fees, commission income and financial planning revenues.
Funds under management and administration climbed 10.7% year on year to £120.7 billion, though Group net flows fell to outflows of £0.9 billion for the half, as £0.4 billion of Wealth Management net inflows in the second quarter only partly offset first-quarter outflows and continued Asset Management withdrawals tied to pressure on active equity strategies.
Statutory profit before tax rose 15.7% to £72.1 million, after acquisition and integration costs fell to £9.5 million from £23.2 million and the company booked £19.0 million in costs tied to the FCA Skilled Person Review announced on 16 June.
"The first half of 2026 has been demanding, but it has also demonstrated what Rathbones is capable of," said Jonathan Sorrell, chief executive.
Rathbones raised its interim dividend by 3.2% to 32.0p and completed a £20 million share buyback on 13 July, following a £50 million buyback finished in February.
The company said ceasing fees on the cash element of portfolios, part of its FCA-agreed remediation programme, is expected to cut second-half income and operating profit by approximately £9 million and reduce the second-half operating margin by 1.3 percentage points, revising its Q4 margin target down to 28.7% from 30.0%.
News Intelligence what this means for the company
Rathbones lifted first-half underlying profit 14.4% to £123.2 million and raised its interim dividend 3.2%, but the outlook is constrained by £19 million in FCA Skilled Person Review costs and a revised second-half operating margin target of 28.7% (down 1.3 percentage points) due to ceasing fees on cash portfolio elements. Net flows turned negative at £0.9 billion outflows for the half, driven by continued Asset Management withdrawals despite Wealth Management inflows in Q2.
Profit growth masks regulatory headwinds: while underlying earnings rose sharply, the FCA remediation programme—including voluntary restrictions on onboarding and certain inflows for clients requiring enhanced due diligence expected to last up to 12 months—will suppress second-half income by ~£9 million and compress margins. The shift from net inflows to net outflows, particularly in active equity strategies, signals competitive or performance pressure that may persist beyond the remediation period.
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