Smith & Williamson said has it has the resources to make bolt-on acquisitions in the near-term and indicated it is considering making larger acquisitions once it has listed, as it reports its full-year results.
In its results for the year to 30 April 2018, the firm said funds under management and administration increased by 6.9% from £18.8bn a year ago to £20.1bn.
Pre-tax profit increased 15% to £46.1m, up from £39.8m a year ago, while operating income growth was up 9% from £244m to £266m.
The income growth was driven by elevated market levels, higher commissions from increased trading volumes and growth in transactional business areas.
Smith & Williamson said this performance was "better than expected" given the firm incurred operating expenses of £221m, including £3.3m spent modernising IT infrastructure and £5m for regulatory costs.
Costs for the infrastructure project are expected to continue into 2018/19 with the firm forecasting expenses of £17m on the project.
This is part of a five-year strategy for the firm, which also includes the hiring and development of high-quality staff and integrated delivery of the group's client services.
Kevin Stopps, co-chief executive of Smith & Williamson, said: "This was another year of solid progress for the group and builds on our longstanding position of strength. We delivered increased profitability, while also continuing to make material investments in our people and technology to support our future success."
The firm will also launch a 'balanced scorecard' to measure the performance of staff and partners. It said this was "the direction of travel" from the Financial Conduct Authority (FCA) in order to provide greater transparency on performance and pay.
Smith & Williamson said it is open to considering acquisitions in order to accelerate its growth plans. Writing in the report, the firm said the firm needed "greater scale" in order to become more efficient and successful in the market.
"Our strategy recognises that we need greater scale to meet our ambitions of becoming more effective, efficient and successful. As our market continues to experience further consolidation, we have and will explore proactive opportunities to acquire 'bolt-on' businesses and hire people with a client-focused culture that complements ours."
Last year, the firm was in talks with Rathbone Brothers over a possible merger between the two companies but were unable to reach an agreement. The report also said it considered acquisitions during the year in the tax and business services divisions and the investment management and banking divsion.
Andrew Sykes, chairman of the firm, said: "We are always alert to acquisition opportunities, where we can strengthen our capabilities and our market position.
"We have set appropriately demanding targets for organic growth, while also seeking to take advantage of opportunities for acquisitions which will arise in an industry going through a phase of consolidation."
The firm has previously spoken about listing on the London Stock Exchange but this would be unlikely to take place until after the second half of 2019, once the firm has completed its investment in technology platforms.
Listing would allow the firm greater access to capital in order to acquire larger firms, Stopps said.
"We have substantial cash resources and can afford to make bolt-on acquisitions and are actively looking in a systematic and disciplined way. We have some [targets] in our sights that can be funded from our existing resources.
"But above a certain scale, we would need to access external capital, which is one of the factors underpinning the decision to list. In the future, we would like to be in a position where we can react to the changes and consolidation in the industry."
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