Charles Stanley issues profit warning and offloads Matterley fund

Charles Stanley has issued a profit warning whilst at the same time offloading the FP Matterley Undervalued Assets fund to Miton.

A trading update issued today said the firm had seen poor performance of commission income due to low transaction volumes alongside continued costs of upgrading service and roll out of its direct-to-client business.

It says that although management had sought to reduce costs, trading results are expected to be well below current market expectations.

At 31 August total client assets stood at £20.5bn, an increase of 1.9 per cent from £20.1 billion at 31 March. Managed funds £11.8 billion, an increase of 4.7 per cent. Charles Stanley Direct which has increased its assets by 18 per cent to £900m.

A Charles Stanley statement says: “This trading pattern has continued through July and August. Whilst management have taken actions to reduce the cost base and boost income the Board now expects that, barring a significant improvement in the markets, trading results will be materially below current market expectations.”

The group has also announced the sale of the FP Matterley Undervalued Assets fund to Miton.

Management of the fund will be assumed by Miton managers George Godber and Georgina Hamilton. Godber previously co-managed the fund at Charles Stanley with Hamilton working as senior analyst on the fund.

Since joining Miton, Godber and Hamilton have launched and managed the CF Miton UK Value Opportunities fund.

Charles Stanley acquired Matterley Asset Management in August 2009.