Services firm Quilter plc yesterday in a trading update reported an outflow of £600 million (R11.39 billion) in client money in the third quarter to September mainly attributed to losses from its Quilter Cheviot unit following the departure of investment managers. File Photo: Timothy Bernard/African News Agency (ANA)

DURBAN – Services firm Quilter plc yesterday in a trading update reported an outflow of £600 million (R11.39 billion) in client money in the third quarter to September mainly attributed to losses from its Quilter Cheviot unit following the departure of investment managers.

This had resulted in the total outflows of £1.4bn in 2019.

Quilter chief executive Paul Feeney said: “As indicated earlier this year, we expected this year to be challenging for net client cash flows, reflecting an uncertain political and economic backdrop coupled with some Quilter-specific factors, in particular, the loss of a certain cohort of investment managers in Quilter Cheviot last year.”

However, Feeney said gross flows within Quilter Cheviot in the third quarter were up year-on-year, partially reflecting the contribution from recent investment manager hires. 

“Notwithstanding the challenging backdrop, we continue to be encouraged by resilient gross flows and high levels of customer asset retention across our businesses, which were broadly stable on 2018, excluding the impact of the Quilter Cheviot outflows. While near-term headwinds remain, this demonstrates that our clients and their advisers value Quilter’s integrated advice-led model, and this continues to provide support to our revenue and operating margin outlook,” he said.

It reported a 9 percent increase in assets under management and administration (AuMA) to £118.7bn for the third quarter to end September. 

In the nine months since the beginning of the year, AuMA from continuing operations has risen by 11 percent to £109.8bn. 

Looking ahead, the group expects a positive contribution from its two acquisitions made early in 2019. 

In February Quilter acquired Charles Derby Group to broaden out its national advice business, and this was followed by the Lighthouse plc acquisition for  £46.2m to consolidate its foothold in the UK advisory market.  

Feeney said the integration of Lighthouse plc and Charles Derby Group were both progressing well and were expected to contribute more meaningfully to flows from next year. 

“The Platform Transformation Programme continues to progress well, with the first migration planned for early 2020, in line with previous announcements. Together, this will help secure our goal of making Quilter the best place to go for trusted financial advice in the UK,” Feeney said

Quilter was unbundled from Old Mutual plc last year.

Quilter's share price closed 2.83 percent lower at R26.44 on the JSE on Wednesday.

BUSINESS REPORT