Schroders has laid out plans to attain £150m in annual net cost savings over the next three years to support “profitable growth”.
Of this amount, £20m has been already realised in the first quarter of 2025, the company said.
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The British fund manager’s transformation strategy will focus on four areas, which includes speeding up improvement pace and ensuring effective utilisation of resources and capital.
It will also focus on broadening client access in Public Markets, driving flows into Schroders Capital as well as building on its wealth management track record.
The aim is to stabilise revenues in public markets by 2027.
The company also intends to generate £20bn in cumulative net new business (NNB) in Schroders Capital and attain an NNB rate of 5-7% of opening assets under management (AUM) per year in wealth management.
These measures are expected to lower the adjusted cost-to-income ratio from 75% to below 70%.
These plans were announced in conjunction with the firm’s 2024 results.
Schroders reported a statutory profit before tax of £558.1m in 2024, a 14% increase from the prior year.
Operating profit for the year ended 31 December 2024 was £640.5m, a 3% fall from £661m in 2023.
This was the result of “higher operating expenses, lower performance fees and reduced returns from joint ventures and associates”.
Net operating revenue, excluding performance fees and net carried interest, rose 2% to £2.29bn in 2024 from £2.25bn a year ago, driven by wealth management and Schroders Capital.
The company’s AUM, including joint ventures and associates, increased 4% to £778.7bn.
The wealth management business recorded £6.3bn in NNB last year, with Cazenove Capital contributing £4bn.
In October 2024, Cazenove Capital acquired Whitley Asset Management.
Wealth Management AUM rose by 15% to £126.8bn, excluding joint ventures and associates, compared to £110.2bn in the previous year. When including joint ventures and associates, AUM increased by 14% to £142.5bn from £124.5bn.
The company’s asset management net operating income for the year stood at £1.92bn, down 2.7% from £1.98bn in 2023.
Asset Management joint ventures and associates recorded £5.7bn in NNB, contributing to an 8% increase in AUM to £101.2bn from £93.9bn in 2023.
Schroders Group CEO Richard Oldfield said: “We will re-focus on our considerable areas of strength and have a firm grip on our challenges.
“Our transformation plan is underway, and will benefit not just our shareholders, but also our people and, most importantly, our clients. We have a strong balance sheet and will deploy our resources and capital rigorously.”
Last month, Schroders Capital named Vikram Bhandari as the head and chief investment officer of Schroders Capital Solutions, a newly created role.
