Mattioli Woods, the wealth management and employee benefits business, is expecting profit for the year ended 31 May 2020 to be 20% ahead of expectations.
The firm has seen “sustained demand for advice from clients set around the complexities we are all facing,” but the impact of the COVID-19 pandemic on financial markets has resulted in a reduction in the company’s income streams linked to the value of clients’ assets and its banking revenue. As a result, Mattioli Woods has noted total revenue for the year ended 31 May 2020 will be marginally ahead of the prior financial year.
The business has pre-emptively implemented a number of actions to contain costs in light of the pandemic. These have included all Board directors reducing their basic salary or fees by 50% and its CEO reducing his basic salary to zero until 30 June 2020, with executive directors’ salaries being temporarily rebased from 1 July 2020 to create an annual saving of over £0.4m.
Mattioli Woods has confirmed it will maintain other employees’ basic salaries, with both these positions to be reviewed at 30 November 2020. Remaining staff bonuses and all directors’ bonuses relating to the financial year just ended will not be paid.
After reviewing administrative expenses, further cost savings of £0.4m over the next 12 months are expected to me made.
Ian Mattioli, Chief Executive Officer of Mattioli Woods, said: “Even in these unprecedented times we are continuing to grow and develop the business, both organically and through continued acquisition. We recognise that a significant number of our clients are being affected by these challenging economic conditions.
“We have taken the decision not to alter any of our fee structures or implement any fee increases, which will continue to give our clients the benefit of reduced total expense ratios. I am confident our combination of lower costs alongside strong investment performance will ensure we continue to deliver good financial outcomes for our clients.
“Ensuring our clients and the Group are in a strong position is key. Having reduced my basic salary to zero from 1 April I am happy to take an ongoing reduction of over 60% of basic salary from 1 July, which sits alongside the positions we have agreed regarding other senior executives’ pay and staff bonuses, all of which enable us to start the new year with clarity around our financial position and strategic plan.
“I believe that providing our people with security around their own positions will see our clients and the business through this complex period.
“I cannot express enough how much I appreciate our people’s endeavour and their dedication to Mattioli Woods and our clients. We believe the benefits of operating a responsibly integrated business will enable us to secure good client outcomes as we move forward through these complex times.”