Rathbones (RAT.L) drops 17% after FCA review flags £900M flows

17% was the share-price move after Rathbones (RAT.L) disclosed the outcome of an FCA-linked Skilled Person Review. Morningstar UK reported the stock at 1,616.99 pence on Tuesday morning, while Rathbones’ own June 16 regulatory update set out the client-flow and cost numbers.

The market impact clears the Tier-1 threshold because it is a single-stock move above 8% tied to a regulatory catalyst. Rathbones said the review found areas for improvement in Consumer Duty implementation and in compliance, oversight and assurance arrangements inside its UK Wealth Management business.

Item | Company figure
New EDD-client onboarding pause | Up to 12 months
Relevant gross inflows from new EDD clients | About £370M in last 12 months
Existing EDD clients affected | 4,700 clients, or 4% of 119,000
Relevant gross inflows from existing EDD clients | About £530M in last 12 months
Expected remediation costs | £60M over two years
2026 underlying PBT impact from cash-fee change | About £9M

The combined flow exposure is about £900M across new and existing EDD-client channels. Rathbones also plans to stop charging investment management fees on cash balances in discretionary portfolios from July 1, a pricing change it expects to reduce 2026 underlying profit before tax by about £9M. The company said the targeted review will assess whether a portion of clients received good outcomes.

The dividend policy is unchanged, and a previously announced £20M buyback has PRA approval. The next items to watch are the two-year remediation timetable, whether the client review changes more pricing practices, and whether the 12-month EDD pause affects net flows in the next quarterly update.