Quilter flags possible ‘remedial costs’ amid UK regulatory scrutiny

London — British wealth manager Quilter said on Wednesday it would review historical services provided to customers amid heightened regulatory scrutiny of charging by fund managers.

Quilter said the review may lead to “remedial costs”, but that it was too early to quantify what those might be.

“We are commencing a review of historical data and practices across our network to determine what, if any, further action may be required,” the firm said, following a Financial Conduct Authority request for data from 20 firms in February.

The company also reported annual profit above analysts’ expectations on Wednesday, helping lift shares 2% in early trading.

Analysts at JPMorgan welcomed the profit beat in a note, but said the risk of remedial costs could be a concern, citing the experience of rival St James’s Place.

St James’s Place has seen its shares tumble in recent months after revamping its charges in October and disclosing gaps in its record-keeping for services provided to customers in February.

Quilter CEO Steven Levin said the review was to ensure good customer outcomes and that it had not seen an increase in customer complaints.

Quilter reported adjusted profit before tax of £167m, up 25% from a year earlier.

The fund manager also confirmed its assets under management increased 7% in 2023 to £103.4bn, while its net inflows of client cash slowed to £100m, down from £1.8bn the prior year.

Levin said he expected outflows to wane in 2024 and the firm was seeing client confidence in investing returning.

“We’re expecting inflows to increase, because there’s a lot of clients who are putting money into cash, sitting on the fence ... and we’ve seen indications that that is changing already,” he said.

The company proposed a final dividend of 5.2p per share.

Reuters