Management fees were boosted by a surge in new business and assets under management.
Wealth management firm Schroders achieved a two-year peak in its share price on Thursday morning, driven by a notable inflow of new business that significantly increased management fees, reports BritPanorama. The FTSE 100 asset manager announced that it expects its full-year operating profit to reach £745 million, up from £603 million in the previous year.
Following this announcement, shares surged by nine per cent to 453.40p. Schroders also projected a rise in net income for the year to £2.6 billion, compared to £2.4 billion the previous year, fuelled by both the increased management fees and a rise in assets under management.
Costs are projected to remain largely flat year-on-year, having reached £1.8 billion last year. The company reaffirmed its commitment to achieving a transformation target of £150 million in annualised net savings by the end of 2027.
Schroders’ cost-income ratio, an important metric for assessing efficiency, decreased to 71 per cent, compared to 75 per cent the previous year. Assets under management, which include joint ventures, rose to £825 billion, thanks to an inflow of nearly £11 billion in new business.
Industry analysts at Panmure Liberum noted, “Schroders has been very clear about what the new management team was trying to achieve: reinvigorate growth through a focus on what was good within the business; clear out marginal businesses acquired previously; address materially the cost base; and reset its relationship with the market.” This outlook follows the company’s unscheduled trading update, which suggests progress ahead of market expectations.
Further, Schroders has a prominent presence in Manchester, along with its Cazenove Capital arm operating across various cities, including Birmingham, Bristol, Chester, Edinburgh, and Leeds. Earlier this year, Lloyds acquired the remaining 49.9 per cent stake in Schroders Personal Wealth, securing full ownership of the previously joint-venture entity.
Established in 2019 in partnership with Lloyds, Schroders Personal Wealth (SPW), soon to be rebranded as Lloyds Wealth, manages £17 billion in assets and serves 60,000 clients. In the first half of 2025, SPW generated an operating profit of £45 million and anticipates that operating costs will exceed the full-year guidance of £9.7 billion.
Oliver Gregson, the chief executive of wealth management at Schroders, remarked that the recent announcement “represents a meaningful step in reshaping our business and focusing on our strategic ambition.”
As Schroders navigates shifts in the wealth management landscape, this strategic realignment hints at a keen focus on delivering sustainable growth. The upward trajectory in both share price and management fees suggests a beneficial adaptation to evolving market demands, while cost containment remains a priority — an essential blend for any asset manager today.
