Rathbones client funds rise 7.2% to £121.1 billion despite continued outflows
Key Facts
Rathbones Group's client funds under management and administration rose to £121.1 billion at the end of September 2026, according to the company's third-quarter trading update. The funds grew 7.2% year on year, supported by market and investment performance, as the group continued to record net client outflows. Rathbones reported operating income of £243.6 million in the third quarter of the year. That represented a 3.0% increase from the same quarter a year earlier, alongside a rise in the value of funds the group manages and administers. Cumulative operating income for January to September 2026 reached £731.1 million. Income for that period rose 6.7% year on year, outpacing the growth recorded in the third quarter alone.
Client fund flows diverged between wealth management and asset management, with the former attracting net inflows of £24 million in the third quarter of 2026. Rathbones said wealth management had thus recorded positive flows for the second consecutive quarter. Asset management, by contrast, recorded net outflows of £425 million over the same period. The company attributed those withdrawals to pressures facing active equity investing in the UK retail investment market. Across the group, net outflows totalled £401 million during the quarter, as asset management withdrawals exceeded inflows into wealth management.
On regulatory matters, Rathbones maintained its estimated remediation programme cost at around £60 million, according to its trading update. The estimate covers the programme through mid-2028, net of insurance recoveries the group expects to receive. Alongside the remediation work, the company expected to begin easing restrictions on fund flows for existing clients subject to enhanced due diligence. It identified the fourth quarter of 2026 as the expected start date for this step for those clients. The company described the anticipated process as a "gradual lifting of restrictions", making the easing a phased process over the coming period.
At its Vision subsidiary, around £2.5 million was provided for the costs of a regulatory review, according to Rathbones' third-quarter disclosure. The review was requested by the Financial Conduct Authority, and the subsidiary set aside the provision to cover its expected cost. The group also reported the departure of advisory firms from the Vision network, with an expected impact on the profitability of that business from 2027. It estimated the reduction in pre-tax profitability, on an ongoing annualised basis, at around £4.0 million from that year. In a development concerning the scope of the group's services, Rathbones Ireland received authorisation to serve existing and new clients in Ireland and the European Union.
On its outlook, Rathbones maintained its underlying operating margin target for the fourth quarter of 2026 at 28.7% in its update. The company linked the target to conditions relating to funds growth, inflation and interest rates during the period. The figure remains a fourth-quarter target, subject to those conditions set out in the group's business outlook. According to Rathbones' investor relations calendar, the company will publish its fourth-quarter trading update on 14 January 2027. It then plans to announce preliminary annual results for the 2026 financial year on 25 February 2027.