The outlook for wealth managers in the UK is deeply uncertain in the face of an upcoming general election, low interest rates, and increased regulation, according to St James's Place and Rathbone Brothers.

While St James's Place's combination of life assurance and wealth management helped it deliver a rise in operating profit which was at the top end of market estimates, rival Rathbone reported profits last year fell 30 per cent after income from client deposits suffered.

For 2010, the UK general election, a low interest rate environment, new UK rules to govern sales of investment products and a lack of clarity on tax made the year tough to call for both groups.

The tone at St James's Place, which is 60-per cent owned by Lloyds Banking Group was cautiously upbeat after operating earnings on an embedded value basis in 2009 rose to £229 million from £204 million in 2008. The group also raised its final dividend by four per cent.

"The current economic climate remains uncertain, and the recovery is fragile, but we begin 2010 with a little more optimism and confidence than last year," CEO David Bellamy said in a statement.

"We are fairly optimistic we will deliver growth this year," he later told Reuters, highlighting nine per cent growth in the firm's distribution network as ground for optimism.

Mr Bellamy urged for a quick end to the continued speculation about when and how Lloyds will sell its stake, even if he played down the impact on clients.

Analysts expect Lloyds to sell the stake, considered non-core, most likely via a share placing in the next two years as banks seek to boost balance sheets.

Rathbone reported profit before tax from continuing operations fell 30 per cent to £29.5 million in 2009, affected by low interest income on deposits and CEO Andy Pomfret predicted "volatile and unpredictable" markets in 2010 and a tough regulatory environment.

"The burden of regulation is increasing and we are very much aware that we may face additional regulations that are aimed at much larger banks," he said in a statement.

Mr Pomret is discounting a notable boost from higher interest rates until next year. He also expects benefits from the acquisition of a group of clients from Lloyds in Scotland, though not before 2011.