The pause on inflows, which could last up to 12 months, stems from a "Skilled Person Review" conducted alongside the Financial Conduct Authority. Investigators flagged deficiencies in how the firm embeds the UK's Consumer Duty regulations, alongside broader gaps in oversight and compliance arrangements. Roughly 4,700 clients—about 4 percent of the firm’s total base—are affected by the restriction on general investment accounts. These clients accounted for £530 million in gross inflows over the past year.
Rathbones to Buy Back £20 Million in Stock After Compliance Shake-up
A 16 percent share price drop forced Rathbones to announce a £20 million stock buyback program this week, following the wealth manager’s decision to halt inflows from clients requiring enhanced due diligence. The firm faces £60 million in net costs linked to compliance failures identified during a regulatory review.
Beyond the immediate compliance overhaul, Rathbones is recalibrating its fee structure to align with fair value requirements. Starting July 1, the firm will stop charging management fees on cash balances held in discretionary portfolios, a move projected to reduce underlying pre-tax profit by £9 million in 2026. The buyback program, managed by Merrill Lynch International, serves as a financial counterweight to the market volatility that has left the company’s shares down nearly 15 percent year-to-date.
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