IntegraFin shares run red on looming post-Brexit regulations despite record inflows
Investment platform IntegraFin posted record inflows of £7.7bn today, however, shares fell into the red after its boss warned of looming Brexit regulations.
Profit after tax jumped 12 per cent to more than £51m in the year to September 30, while funds under direction swelled nearly a third to £52.1bn.
But shares tumbled more than 14 per cent to 517.5p per share by market close, after CEO Alexander Scott cautioned the uncertainty that accompanies the Brexit transition.
From the beginning of next year, the new Investment Prudential Regime from the Financial Conduct Authority, which sets out post-Brexit regulations for investment firms, will come into effect.
The regulations will mean investments firms like IntegraFin will have to abide by higher capital requirements.
While Scott assured that “sufficient” capital has been built up and retained for this, the scent of ambiguity over the new rules has investors spooked.
The Brexit transition will also see new rules imposed for investment firms within the European Union, which director of ESG at MJ Hudson, Emma Bickerstaffe told Morning Wire offers further complexity to managers and funds operating within the UK as well as the bloc.
“For some firms, the introduction of new reporting requirements will pose an immediate challenge,” she said.
The EU’s rules seek to ensure firms have secure environment, social and governance (ESG) policies, which forms part of its wider sustainable finance action plan.
“Firms are still getting their head around what’s required of them,” Bickerstaffe continued, adding that she expects “much more clarity” sometime next year.
Talent pools run dry
Alongside the upcoming regulatory changes, the IntegraFin boss noted that there had been some recruitment hang-ups as talent pools dried up amid the pandemic.
“With significantly increased flows over the year, this has increased pressure on our service teams to maintain the service standards we set ourselves,” he said.
“Recruitment of experienced staff has proven more difficult in recent months, as Covid-19 has led many people to consider their priorities for the future and, globally, many are opting to make permanent changes to their lifestyles.”
In a bid to lure in new recruits as the investment platform marks record inflows, IntegraFin will continue to offer a hybrid work style.
“Understandably, the confidence of our people about returning to office working remains low, with concerns about travelling on crowded public transport being the major anxiety,” Scott explained.
“As long as the threat of another UK lockdown remains a serious possibility, we will retain our voluntary office attendance policy.”