Quilter Faces Potential Remedial Costs Amid FCA Charges Review

Quilter, one of the 20 major firms scrutinized by the Financial Conduct Authority (FCA) over ongoing customer charges, may face remedial costs as a result.

In its preliminary full-year results for 2023, released today (March 6), Quilter disclosed that the FCA had approached them, prompting a review of their historical practices and data.

Steven Levin, Quilter’s CEO, stated, “Aligned with our commitment to delivering positive outcomes for our customers, we are initiating a thorough review of our historical data and practices across our network to determine if any further actions are necessary. While this may result in remedial costs, it is too early to estimate.”

On February 15, the FCA reached out to 20 of the largest advisory firms, requesting information about their ongoing advice services under the consumer duty framework. The regulator requested data on how many clients are due for a review of the ongoing suitability of the advice they’ve received, for which they are still being charged.

Levin noted that complaints about ongoing servicing have remained low over the past four years. He emphasized that any cases where customers did not receive the services they paid for are thoroughly investigated, and remediation is provided where appropriate.

In 2023, Quilter saw a 25% increase in adjusted profit before tax, rising to £167 million from £134 million in 2022. The firm’s assets under management and administration also grew, ending the year at £103.4 billion, up from £96.2 billion at the end of 2022.

Additionally, Quilter achieved £45 million in cost savings by the end of 2023, a year ahead of schedule, and aims for another £50 million in savings by 2025. These savings include property sales and streamlining internal administration and governance.

Despite these successes, net inflows into Quilter’s core business were £832 million, down from £2.1 billion the previous year. New business inflows in the affluent segment grew by around 7% in 2023, despite overall lower levels of new business in the market. However, there were net outflows in both the affluent and high net worth segments.

Levin remarked, “The year 2023 marked a period of strong performance.”We achieved higher levels of new business and record profitability through increased revenues and 3% lower costs. Our affluent segment is showing strong growth, and our high net worth segment is investing in future growth, which will materialize in the coming years.”

In February, Quilter expanded its WealthSelect managed portfolio solution to three third-party platforms, which is expected to generate new business for the company.

Overall, Quilter’s 2023 results reflect a year of significant achievements and challenges as they navigate the ongoing regulatory scrutiny and market dynamics.