Charles Stanley announced yesterday (9/1/2014) that its Finance Director James Rawlingson was “leaving with immediate effect”. This follows the appointment of a new CEO in December after the publication of a dire set of half year results at the end of November. Funds under management were static and revenue from the Financial Services Division and platform Charles Stanley Direct were up substantially but higher costs resulted in a loss before tax of £3.9 million. The dividend was maintained at the half year, but the abrupt loss of a CFO is rarely a good sign.
The higher costs resulted from a “major upgrade to our systems and processes” as a result of “rising expectations” among their clients and their regulator.
These issues potentially not just impact investors in the company, but also as a stockbroker it potentially affects their clients. A stockbroker in financial difficulties is never a pleasant experience for their clients, particularly those in nominee accounts. There may not be any need to immediately panic but it would be surely advisable to keep an eye on their financial results and announcements. Several organisations provide such a service – for example InvestEgate from Financial Express which this writer uses.