Charles Stanley posted growth in profit before tax of 57% in the year to 31 March 2020, despite the funds under management and administration (FUMA) falling 16% to £20.2bn as a result of the coronavirus pandemic’s impact on markets.
Revenue also grew across all three divisions of the business, up 11.5% on the previous year, although the financial planning arm saw another net loss, with its £8.7m revenue unable to outweigh costs of £13.8m.
However, Charles Stanley CEO, Paul Abberley, attributed this to recently hired financial planners having not yet reached "equilibrium", a process which can take "up to two years" as they develop a full book of clients.
"The underlying business model is profitable and I should stress that we view the financial planning division as a profit centre and over time those losses will be reduced as we get into our stride with the new people that we have hired."
A "multi-year transformation programme" was announced as part of 2019's annual results at an estimated cost of £9.5m, which has since been revised downwards, although an exact figure is not provided.
In 2020, the cost of restructuring was placed at £3.5m, of which £1.6m was attributed to redundancy costs, although the firm was unable to provide an exact figure as to how many individuals this represents.
Ben Money-Coutts, chief financial officer at Charles Stanley, confirmed that the headcount was lower than the previous year, attributing the reduction to both "natural attrition" and "proactive steps taken by management".
Once completed, annualised benefits from the restructuring process are still anticipated at £4.5m, although even in the coming financial year the firm anticipates £2.6m of those benefits.
Earnings per share and total dividend both rose year on year, with the former climbing 58% to 28.03p per share and the latter up from 8.75p per share to 9p per share.
While its financial planning arm posted losses, both the investment management services division and Charles Stanley Direct saw increased operating profits as a result of strong revenues.
Its investment management unit recorded increased operating profits of 55%, up from £15m to £23.4m, managing to far outweigh the additional £6m in costs for 2020 compared to the previous year.
The division saw its total FUMA fall 17% to £17.2bn, "primarily as a result of the market decline in the last two months", while its average FUMA only fell 1.4% to £20.7bn. Discretionary funds increased their share in the investment services FUMA and comprised 70% of the total.
Online trading platform Charles Stanley Direct grew its operating profit by 60%, up to £1.6m, while its average FUMA was up 6.9% on the year.
Following the coronavirus pandemic, Charles Stanley is "unlikely to return to the same ways of operating as occurred previously", with "flexible and remote working" likely to remain as some in the firm have "found that productivity increases" when working from home, according to Abberley.
Faster introduction of new technology is also likely to stay as the speed with which it has recently been implemented successfully represents "proof of concept" that the "pace of digital enhancement" can be increased "without creating undue risk" in business continuity.