British fund manager Schroders has reported a pre-tax profit of £649.9m for the year ended 31 December 2018, in its annual results.

This marks a decrease of 15% from £760.2m in the previous year.

The drop in profit was said to be due to one-off initiatives such as structural changes to the group.

The group’s profit before tax and exceptional items was £761.2m, down 5% from £800.3m last year.

Assets under management and administration totalled £421.4bn the end of December 2018, a fall of 6% from a year ago.

The group reported net outflows of £9.5bn in 2018, as against net inflows of £9.6bn in 2017.

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Wealth Management

Schroders’ wealth business posted net income of £289.8m for the twelve months to December 2018.

This is a rise of 6% from the previous year’s figure of £273.3m.

Compared to last year, the division’s profit before tax and exceptional items increased 3% to £93.4m while profit before tax rose 1% to £68m.

Assets under management at the wealth business were £43.7bn as at 31 December 2018, compared to £45.9bn in 2017.

Schroders group CEO Peter Harrison said “There was strong demand from Wealth Management clients and we announced that we would be entering into a partnership with Lloyds Banking Group to expand our proposition in the UK savings market, under the brand of Schroders Personal Wealth.”

Last month, Schroders and Lloyds Banking Group announced details of their joint financial planning business, including its name: Schroders Personal Wealth.

The news follows the announcement in October of last year of a joint venture between the two British banking brands.

Schroders’ wealth business includes Cazenove Capital, the wealth management business Schroders bought in 2013.

Asset Management

The asset management arm of Schroders registered net income before exceptional items of £1.8bn in 2018, versus £1.75bn a year earlier.

The unit’s profit before tax and exceptional items dipped 5% to £670.8m from £705.9m.

Profit before tax at the unit dropped 15% year-on-year to £588.2m.

Schroders group CEO Peter Harrison said: “We have been pleased with the underlying strength of the business and the resilience of our diversified business model in 2018. We were delighted to achieve over £85 billion of notified net new inflows at the year end, despite seeing net outflows of £9.5 billion.

“We continued to invest for growth and saw good progress in a number of strategically important areas.

Board changes

On Thursday, Schroders also announced the appointment of two new directors, Deborah Waterhouse and Leonie Schroder.

The announcement follows the death of Bruno Schroder, heir to the bank’s founder and its longest-serving board member, who died on 20 February 2019.

In a statement, Schroders said, “Following those consultations, the Committee received from the trustees of the family trusts a proposal that Leonie Schroder was their preferred candidate to succeed Bruno Schroder on the Board.”