Rathbones Group Plc saw its shares plunge after revealing it will face £60 million ($80.4 million) in extra costs tied to a Financial Conduct Authority review. The wealth manager expects to incur the charges over the next two years as it addresses issues identified in the watchdog's probe.
The FCA review focused on how Rathbones treats its customers, a central concern for the UK financial regulator in recent years. The scale of the expected financial hit signals serious compliance shortcomings, according to analysts.
The £60 million figure represents a significant burden for the firm, though it is spread over a two-year period. Rathbones did not specify the exact nature of the issues or potential further penalties.
Investors reacted sharply, reflecting worries about both the direct financial impact and damage to Rathbones' reputation. The shares fell sharply in London trading, erasing millions in market value.
A potential silver lining: the upfront cost could pave the way for a cleaner regulatory slate, provided the firm fully addresses the FCA's concerns and tightens its compliance systems.