CAY.L Regulatory News (CAY)

Charles Stanley Group PLC

25 Luke Street

London

EC2A 4AR

T: 020 7739 8200

F: 020 7739 7798

DX: 123150 BROADGATE-1

www.charles-stanley.co.uk/investor-relations

YEAR END PRE CLOSE TRADING UPDATE AND NOTICE OF RESULTS

16 April 2014

TRADING UPDATE

Charles Stanley Group Plc ("Charles Stanley") is providing a pre-close update on trading in the 12 months to 31 March 2014, ahead of announcing its preliminary results on Friday, 20 June 2014.

Funds Growth

The growth of funds under management and associated revenues has been encouraging:

· Total funds under management and administration at 31 March 2014 reached a new high of £20.1 billion, up 13.5% from £17.7 billion at 31 March 2013; the WMA Balanced Index has risen 2.6% in the same period;

· Within that figure, managed funds increased by 20.4% to £11.2 billion up from £9.3 billion at 31 March 2013;

· Discretionary funds from new investment managers taken on during the year totalled £0.8 billion;

· Charles Stanley Direct continues to increase funds under administration during the period and now has over 15,000 clients and new funds of over £200 million. Whilst it is still very early days, we are pleased with progress;

· The newly announced Budget positions the Wealth Management sector as potential winners, and highlights the greater need for advice for customers whose increased choice of investments is now more than simply annuities. Our SIPP administration business will also benefit.

Acquisitions

Charles Stanley has had an active year in acquiring further funds:

· The acquisition of Pan Asset has strengthened the Group although not all assets are yet on the Charles Stanley platform and they have not added a significant contribution for the year ended 31 March 2014;

· The opening of the new Leicester branch has brought additional funds under management into the Group. The costs relating to the acquisition that have been expensed during the year amounted to £2 million.

Costs and impact on profits

As noted in our Q3 statement, costs have continued to grow in order to support the growth of the Group. Whilst revenues are well ahead of expectations in the period, including a strong performance from Charles Stanley Securities, profits before tax for year-end 31 March 2014 are likely to be more than 10% lower than current market expectations, in part due to cost items of an exceptional nature.

These costs have been incurred in a year of transition when the business has invested in its core foundations in order to support this future growth, and include:

· Post RDR consultancy work and other exceptional professional fees which increased one-off costs during the period;

· As a consequence of this work it has led to further enhancements to our middle office including risk management head count and additional IT systems expenditure.

It is recognised that there are elements of the increased costs that are not exceptional in nature, but rather represent the increased cost of doing business in a highly regulated industry. However it is part of the Group's strategy to review its cost base over the coming year in order to strengthen margins.

Corporate Governance

· During the year Charles Stanley has also continued the review of its governance structure which started last year with the appointment of non-executive directors and has incurred additional on-going costs in strengthening its management structures and systems. This investment in improved management and systems will benefit the Group in the future.

Full year results

The results for year to 31 March 2014 will be announced on Friday 20 June 2014.

For further information please contact: