Rathbone Brothers to boost business by up to £100m

Rathbone revealed in its annual results last week that the deal, which hit the headlines due to the controversial departure of a team of BoS investment managers to rival Rensburg Sheppards just days before it was finalised, has so far seen the transfer of more than 2,500 clients, equating to some 500m in funds under management.

However, in an interview with Scotland on Sunday, Rathbone chief executive Andy Pomfret said his firm could benefit from a further 50m-100m before a fee holiday for former BoS clients runs out in October. Rathbone only agreed to pay for BoS assets if and when they were transferred.

So far 12 staff have been transferred from BoS's portfolio management service (PMS) to Rathbone's office in Edinburgh under the terms of the deal. It is thought this figure could rise further over the next few months, taking Rathbone's total headcount in the Scottish capital to 40-45 staff.

The departure of the eight-strong BoS investment team to Rensburg prior to the agreement last October caused consternation in the Edinburgh investment community, raising fears that it could scupper a deal with Rathbone.

However, sources close to the situation have since suggested that it allowed Rathbone to negotiate better terms with BoS, which is now part of Lloyds Banking Group.

Rathbone has recently begun an internal inquiry into whether it should relinquish its banking licence. It is one of the rare wealth management firms to hold a licence, but Pomfret said the regulatory burdens and costs associated with maintaining it are becoming increasingly onerous.

"Clearly the advantage of keeping it would be if interest rates go back up, but there's an ever-increasing cost associated with having a licence," he said. "

Handing it back will make little difference to clients."