Wealth manager Charles Stanley (CAY) has vowed to revamp its business strategy and model, as it struggles to meet its operating margin target.
The group, which in recent years has seen regulatory costs erode margins and failed to attract funds at targeted levels, told investors it would be “launching a significant transformation project” amid a consultation with senior employees this month.
Plans for the overhaul include the creation of better IT systems, a simpler management structure and “a single back and middle office”, alongside simplification and standardisation of processes for its investment professionals. The heads of the investment management, asset management and online divisions have all been told their jobs are at risk.
No details have been provided on the costs of restructuring, or the potential annual savings, although the initiatives are said to support a goal of achieving a 15 per cent net margin.
The market reacted positively to the news, pushing Charles Stanley shares up by more than 5 per cent in the hours following the announcement.
In its financial year to March, total funds under management rose 1.3 per cent to £24.1bn, as a £0.7bn investment gain and new client inflows of £1.4bn were offset by outflows of £1.8bn. By contrast, the MSCI WMA Private Investor Balanced Index climbed 3.9 per cent in the same period.
