Rathbones’ funds under management and administration (FUMA) fell by 4.7 per cent in Q1 2025, from £109.2bn to £104.1bn, its First Quarter Trading Update has revealed.

This included a reduction from £93.4bn to £88.7bn in its wealth management segment and from £15.8bn to £15.4bn in its asset management segment.

Rathbones noted that its wealth management FUMA valuations and fee income calculations coincided with a “moment of particular market weakness”, with over 50 per cent of its wealth management fees being billed on 4 April, when markets had fallen by around 4.6 per cent since 31 March.

Gross inflows fell from £3.2bn to £2.7bn during the quarter, which Rathbones said reflected the impact of the focus on migrating Investec Wealth & Investment (IW&I) client accounts onto the Rathbones platform.

Outflows increased from £3.4bn to £3.5bn during the first quarter of 2025, while net inflows in RIM discretionary and managed propositions fell from £395m to £62m.

As at April 2025, Rathbones had migrated 90 per cent of IW&I client accounts onto its platform, and it remains on track to complete the migration of the remaining clients by the end of the second quarter.

Net outflows in IW&I rose from £409m to £425m, as the reduction in gross inflows was offset by a reduction in IW&I's gross outflows of 15.5 per cent relative to Q4 2024.

The group’s total operating income fell slightly from £223.6m to £220.1bn during the quarter, primarily driven by market volatility at the time of client billing, although there was also a decline in fee-based income.

Commenting on the update, Rathbones group chief executive officer, Paul Stockton, said: “In a quarter that witnessed some considerable market turbulence, the group saw net outflows, primarily due to a lower level of gross inflows as the final stages of the migration process impacted IW&I in particular.

“Rathbones Asset Management's single strategy funds and multi-asset funds saw elevated outflows as a result of ongoing market volatility. This reflected the broader industry trend of weaker flows into equity, fixed interest and multi-asset funds, with flows leaning more towards money-market funds in the quarter.

“Market volatility reinforces the enduring value of long-term, relationship-led wealth management, and creates opportunities for asset managers, but sustained volatility can also impact revenue and profitability.

“Wealth management FUMA valuations and fee income calculations at the end of the quarter coincided with a moment of particular market weakness.

"This heightens the need for our ongoing cost discipline, and whilst we continue to invest to support growth opportunities and deliver synergy benefits, we will be looking to manage operational cost levels actively to mitigate these effects on profitability as much as possible.

“The foundations for future growth are strong, and I look forward to welcoming Jonathan Sorrell when he joins us in July, securing a smooth leadership transition that continues to support our clients and colleagues as we look towards the next chapter for the group."

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