Curtis Banks Group PLC (LON:CBP) shares shot higher on Monday as it reported strong trading in the past quarter and said it has taken further action to achieve a better balance between fee income and interest income.
The SIPP and SSAS pension scheme provider said it has enjoyed a “step change” in the quality of its revenue streams, with a material increase in recurring fee income, after completing the acquisitions of Talbot & Muir and Dunstan Thomas earlier in the year.
Following a subsequent review of the company’s business model, management said they plan to increase fee income by increasing the annual SIPP administration fees paid on its mid and full SIPPs from the start of February 2021.
Chief executive Will Self said the changes to the SIPP annual administration fee would provide greater transparency for clients, reduce the proportion of interest income of total revenues but also ensure the business continues to meet the needs and expectations of clients and their advisers in the future.
“These fees remain competitive against the market, reflecting the value of Curtis Banks’ enhanced proposition,” the company said, adding that there are also steps being taken to improve the interest received by clients as rates increase.
“Together with these fee changes, the actions will materially reduce the group’s overall sensitivity to interest rates. This will provide a robust and sustainable foundation for future growth,” Self added in the trading and operations update
Since its interim results in September, the group said it has performed well and remains in line with market expectations in spite of the considerable headwinds this year, with the benefits of additional recurring SIPP revenues and further diversity of revenues to be reflected in results for this calendar year.
Self continued: “Curtis Banks is the largest independent SIPP provider in the UK and has always taken a leadership position, evolving our proposition and driving change in the sector. We have continued to invest in the business, committing GBP5m to investment in technology over a five-year period.
“This has already delivered a new online portal, improving data visibility and the customer journey. Investment in systems, processes and our people is vital to ensuring our business continues to meet clients’ needs and expectations into the future, as well as for us to continue to innovate.”
He added: “Curtis Banks continues to perform strongly despite a challenging market environment and the integration of Talbot and Muir and Dunstan Thomas continues at pace. We remain well positioned for the year ahead.”
Shares in the company rose over 11% to 223.28p on Monday morning.