The boss of a wealth management firm that looks after £9.4 billion of clients’ money has decided to stop taking a salary out of the business as the economy freezes.
Ian Mattioli, chief executive officer of Leicester-based Mattioli Woods, said he was stopping his salary completely, and said the board had also agreed to cut their basic salaries or fees by half for at least the next three months.
The business, which reported profits of £6 million last year on a turnover of £30 million, has had to radically rethink its financial strategy in light of the lockdown, including cancelling bonuses.
However it is planning to pay an interim dividend to shareholders. Other listed firms have cancelled dividends in a bid to keep cash in the business.
Despite everything, Mattioli Woods plans to stay fully operational throughout, providing its pensions and investment services to clients.
In a Covid-19 update it said: “We believe the benefits of operating a responsibly integrated business, combining all these core areas, will enable us to secure exceptional client outcomes despite the complex conditions we face.”
Shares in the business jumped substantially following the update.
Some of the action it has taken includes allowing more than 600 staff to work from home and introducing shift rotations for 30 people needed in its administration hubs across the country.
Most Read
Mr Mattioli said: "In light of the uncertain trading conditions we are implementing mitigating actions to contain costs and protect our financial position.
“Alongside this, I have chosen to reduce my basic salary to zero and all other plc board directors have agreed to reduce their basic salary or fees by 50 per cent until June 30, 2020, when we will review the position further.
“I believe this position supports the board's independence and ensures a strong governance framework.
“In addition, we are reviewing our operating costs, restricting travel and reducing discretionary spending.
“We have confirmed to all staff that it is likely no bonuses will be paid in respect of the current financial year, providing additional resources to address the impact of Covid-19.
"Our profit outlook for the year ending May 31, 2020 remains in line with management's expectations.
“The acquisition of Hurley Partners is subject to regulatory approval and is expected to complete in the second quarter of 2020.
Don’t miss
“The group enjoys a strong balance sheet and following completion of the acquisition will continue to have significant cash balances and headroom on its regulatory capital requirements.
"The board is pleased to confirm the previously announced interim dividend of 7.3 p per share will be paid to shareholders today and the board will consider how the global crisis evolves in formulating its recommendation for any final dividend.
“The board will continue to keep the market updated as the situation develops.
“The group remains in a strong financial position and we will continue growing our business when it is appropriate to do so.
"We are passionate about looking after our clients' financial affairs and I hope all of our clients, staff, suppliers and shareholders come out of this crisis in the best possible shape."
In its update to the London Stock Exchange the business added: “While it is too early to predict what the full impact of Covid-19 will be, we do anticipate an inevitable disruption to trading in the coming months and an associated reduction in the group's income streams linked to the value of clients' funds under management and advice and banking revenue.
“However, unlike many wealth managers, the majority of the group's revenues are fee-based, rather than being linked to the value of clients' assets, with our time-costed advice to clients set around the complexities we are all now facing and giving our business a revenue profile that typically is less sensitive to investment markets.”