RBC expects UK wealth management firms to report solid net flows for the first quarter of 2026, driven primarily by positive trading conditions in January and February, before market volatility in March weakened retail investor activity.
The bank begins its preview of Q1 flow reporting with Brooks Macdonald Group (LON:BRK), which reports on Wednesday. Ahead of company updates, RBC has applied small negative adjustments to net-flow forecasts for most names in the sector, reflecting its assessment that March presented more challenging conditions and likely reduced retail client participation.
At the sector level, however, RBC still foresees decent net flows for Q1. The bank cites the combination of positive portfolio returns during the early part of the quarter and the benign outcome of the UK Budget in November as supportive elements underpinning flows in January and February.
RBC also implemented modest downward revisions to its second-quarter 2026 flow estimates, and it said expectations for flows through the remainder of the year will remain contingent on geopolitical developments. The bank emphasized that it will rely on management commentary from reporting firms to clarify how trading patterns evolved across March and into early April.
Using 2022 as a reference point, RBC highlights that organic growth in the sector stayed positive even amid difficult market conditions that year, with higher interest income helping to offset earnings pressure from lower markets. The bank notes that current valuations sit close to the price-to-earnings trough observed in 2022, providing perspective on the present valuation backdrop.
RBC points to capital returns as an additional buffer for equity downside, noting that capital distributions averaged 5.1% of market capitalization for firms in the coverage universe. The bank observed that most companies are trading toward the lower end of their price-to-earnings ranges when measured over the 2020 to present period, and that current P/E ratios for many names are near the minima seen in 2022.
RBC identified a set of firms that have experienced implicit derating year-to-date, where share price moves have been more negative than earnings-per-share revisions. That group includes Tatton Asset Management PLC (LON:TAMT), St. James's Place PLC (LON:SJP), IntegraFin Holdings PLC (LON:IHPI) and Brooks Macdonald Group (LON:BRK).
On ratings, RBC retains Outperform recommendations on Quilter PLC (LON:QLT), Rathbones Group (LON:RAT), IntegraFin Holdings PLC (LON:IHPI) and Tatton Asset Management PLC (LON:TAMT). The bank said it made small negative revisions across most names it covers, with the exceptions of Tatton Asset Management PLC (LON:TAMT) and AJ Bell PLC (LON:AJBA), which were not nudged lower.
RBC expects market attention to focus most on updates from St. James's Place PLC (LON:SJP) and Brooks Macdonald Group (LON:BRK) as reporting gets underway, as investors seek clarity on trading conditions in March and early April.
Note: The bank's outlook remains subject to the quality of management disclosures and evolving geopolitical developments, which could influence flow momentum later in 2026.