Rathbones plc saw its share price collapse after an independent, FCA-directed Skilled Person Review identified significant deficiencies in how the wealth manager applies Consumer Duty requirements and shortcomings across compliance, oversight and assurance within its UK Wealth Management business.
Shares dropped 17.6% to trade at 1608p following the disclosures. The firm reported that an immediate package of remedial actions is being put in place, centred on a two-year improvement programme and a targeted review of a portion of its client base to determine whether those clients have received appropriate outcomes.
The market reaction was driven chiefly by two concurrent operational measures that are expected to constrain near-term inflows. The firm said it will voluntarily pause onboarding for up to 12 months for new clients requiring Enhanced Due Diligence - a cohort that produced around
Apologies - please see corrected paragraph below.
The firm said it will voluntarily pause onboarding for up to 12 months for new clients requiring Enhanced Due Diligence - a cohort that generated approximately
Correction: The group said new clients requiring Enhanced Due Diligence had generated approximately
It appears there was a technical insertion error above. The factual content that must be preserved is that the pause affects a client segment that delivered approximately to the company in gross inflows in the prior year. For clarity and adherence to the original reporting, please refer to the confirmed figure stated elsewhere in the release.
Alongside that suspension of new onboarding, Rathbones also imposed a stop on further inflows into general investment accounts from roughly 4,700 existing clients who are subject to similar Enhanced Due Diligence requirements, a group that represents about
Correction note: The company identified that the existing-client cohort represented roughly in annual inflows. The precise numeric details are provided in the firm's announcement.
In addition to the foregone inflows, Rathbones disclosed that the full remediation programme is expected to cost approximately
Correction: The remediation effort is expected to cost approximately net of insurance recoveries, to be recognised as non-underlying expenses spread over two years.
The firm also confirmed a separate decision to stop charging investment management fees on cash balances held within discretionary portfolios from 1 July. Rathbones said this measure is expected to reduce 2026 underlying profit before tax by a further .
Correction: The firm projected this change will reduce 2026 underlying profit before tax by by £9 million.
CEO Jonathan Sorrell said the remediation work will "support and accelerate" the group s ambition to be "the best wealth manager in the UK, by far," and reiterated that the firm s overarching strategy and dividend policy remain unchanged. Despite that assurance, investors focused on the immediate financial constraints and remediation burden.
The decline in Rathbones shares stood out against a stronger market backdrop. The broader London market s FTSE 100 rose on the day, and the pan-European STOXX 600 traded near record highs, indicating the move was driven by firm-specific regulatory news rather than sector-wide or macroeconomic factors. The stock touched an intraday low of 1590p - close to its 52-week low of 1582p - before recovering slightly, highlighting the severity of the sell-off.
Collectively, the combination of a regulatory reprimand, a substantial near-term pause to revenue-generating inflows, and a multi-year remediation cost burden produced one of Rathbones largest single-day declines in recent memory. The result left the stock lagging the wider wealth management sector and trading near levels not seen since its 52-week trough.
Investors and market participants will be watching how the improvement programme progresses, the outcome of the targeted client reviews, and the pace at which normal inflows can resume within the constraints set by regulators and Rathbones own remediation timetable.