UK wealth manager Rathbones’s shares slumped on Tuesday as it paused taking on certain higher-risk clients in the wake of a review prompted by engagement with the UK financial conduct watchdog. The significant setback comes as the firm continues to try to convince the Central Bank of Ireland to allow it set up an European Union (EU) hub in Dublin, aimed at targeting UK expatriate networks in continental Europe as well as Irish clients. Rathbones said it expects to incur £60 million (€69.4 million) of additional costs over the next two years, as it addresses issues found the review into how it treats its customers. The so-called skilled person review, the scope of which was set by the Financial Conduct Authority (FCA), identified areas for improvement within the group’s UK wealth management business. The London-based firm said that it is halting taking on new clients that require “enhanced due diligence” – or potentially higher-risk clients – for as long as 12 months as it focuses on implementing changes in procedures and controls. In the last twelve months, the firm received £370 million from such clients to manage. The stock plunged as much as 18.3 per cent in early trading, the firm’s steepest intraday decline since it joined the London Stock Exchange’s official list in 1992. ‘No profit and crap governance’ – is Elon Musk’s SpaceX actually worth $1.75 trillion? Listen | 41:54UK wealth managers have faced heightened regulatory attention in recent years following the FCA’s introduction of broad consumer duty requirements, which oblige advisers to demonstrate that the services they provide deliver fair value relative to the fees charged to clients.“We are committed to operating to the highest standards on behalf of our clients. The work we are undertaking will support and accelerate our vision to be the best wealth manager in the UK, by far,” said Rathbones’s chief executive, Jonathan Sorrell, in a statement. “Our strategy is unchanged and we continue to make strong progress against the plan set out in February. I am grateful for the constructive engagement with the FCA, and the continued trust of our clients as we implement these improvements.”Rathbones said in April that it had taken a “significant step” in setting up an Irish unit by appointing financial sector compliance veteran Dolores Geaney as managing director. Geaney, who brings with her 30 years of experience in global financial services, including leadership roles at Davy, Investec and more recently with Wells Fargo International, will be central to developing new relationships across local and UK expatriate networks, once approvals are in place, it said at the time. The authorisation process remains ongoing. A spokesman for Rathbones declined to comment on whether the UK issue will have any bearing on plans for the Irish unit. A spokesman for the Central Bank of Ireland also declined to comment. Rathbones had £115.6 billion of funds under management and advice at the end of last year. It started as a family-run timber merchant in 1742, and by 1912 focused entirely on managing clients’ wealth.Ireland’s wealth management industry has gained significant momentum in recent years. AIB and Bank of Ireland are expanding their offering through the purchases of Davy and Goodbody between 2021 and 2022, while a number of UK-based firms are launching operations in Ireland to support UK clients residing across the EU.The Irish units of the likes of RBC Brewin Dolphin, Gresham House and Quilter Cheviot have also invested heavily in developing their businesses.