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Quilter Reduces Financial Provision for Advice Redress Following FCA Review

WHAT'S THE STORY?

What's Happening?

Quilter has announced a reduction in the financial provision set aside for compensating clients who did not receive ongoing advice services. Initially, the firm allocated £76 million for this purpose, but has now decreased the amount to £70 million after a skilled person report was submitted to the Financial Conduct Authority (FCA). Quilter was among 20 large firms contacted by the FCA due to concerns over ongoing advice services. The firm has reported a 6% increase in total assets under management and administration, reaching £126.3 billion, with net inflows of £4.3 billion. Additionally, platform assets under administration rose by 8% to £92 billion since the year-end. Revenues grew by 2% to £337 million, driven by higher management fee revenue.
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Why It's Important?

The reduction in the financial provision for advice redress by Quilter highlights the ongoing scrutiny and regulatory pressure faced by financial firms in the UK. This move could impact the firm's financial planning and client trust, as it navigates the FCA's concerns over advice services. The increase in assets under management and administration, along with revenue growth, indicates Quilter's strong market position despite regulatory challenges. The firm's investment in its Advice Transformation Programme aims to enhance productivity and client service, potentially setting a precedent for other firms in the industry. The FCA's targeted support measures may favor firms like Quilter, which can leverage scale efficiencies to deliver competitive client propositions.

What's Next?

Quilter plans to continue its Advice Transformation Programme, aiming to improve productivity through enhanced client relationship management systems. The firm is approaching the end of its second simplification programme, targeting additional cost savings by the end of the year. Quilter anticipates that second-half adjusted profit will be similar to the first half, as increased costs from brand spending and business investments are expected to offset higher revenue contributions. The firm will continue discussions with the FCA regarding the implementation of the potential remediation programme, which could influence its future financial strategies and regulatory compliance.

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