Brewin Dolphin suffers 18% fall in profit

twitter-iconfacebook-iconlinkedin-iconmail-iconprint-icon
Search supported by
Brewin Dolphin suffers 18% fall in profit

Discretionary fund manager Brewin Dolphin has suffered a hit to its profits, largely due to “residual” effects of the business restructuring over the past three years.

According to the group’s full year results for the year ending 30 September, the firm saw pre-tax profits slide to £50.1m from the £61m posted at the same point last year.

The company was, however, faced with exceptional costs of £4.6m in 2016, which included redundancy costs, one-off migration costs, and onerous contract costs.

In 2015, the firm also enjoyed a £9.7m gain from the sale of the group’s stake in Euroclear, while it also received a £1.1m levy rebate from the Financial Services Compensation Scheme.

Despite the drop in profit, the firm saw funds jump 10.6 per cent, reaching £35.4bn from the £32bn seen last year.

Of these funds, £28.9bn were from the firm’s discretionary business, marking a 16.5 per cent increase compared to the £24.8bn posted in 2015.

David Nicol, chief executive of Brewin Dolphin, said the group has made “encouraging progress” in 2016. 

“Financial performance has been resilient against the increasingly volatile and uncertain market backdrop.” 

Over the past few years the firm has re-focused the business on its core services of discretionary investment management and financial advice, coupled with improving operational efficiency in 2016.

The number of clients receiving a service that combines investment management and financial planning also grew significantly during 2016, and Mr Nicol said this means Brewin can take a "wider role" in the lives of its customers.

"For this reason, we are continuing to seek and develop increasing numbers of financial advisers and planning professionals," he said.

In 2015, Brewin pledged to grow its core discretionary business by a third in five years.

The firm reached a record £2.7bn of gross inflows, including £900m gross inflows from intermediaries and £500m of funds into its model portfolios.

The firm also saw its managed portfolio service pass the £1bn milestone, with funds at year end of more than £1.3bn.

Mr Nicol said: “We achieved this despite the significant challenges we had to face during the year, including the poor market conditions of the first six months and the residual effects of the business restructuring over the last three years. 

“In addition, we have just started to introduce some of the new services we have in planning and development, meaning that positive impact is yet to come.”

Mr Nicol said the markets are marked by the heightened sense of political and economic uncertainty, both in the UK and elsewhere. 

However, he said Brewin is “financially strong and willing” to innovate and adopt new approaches alongside its traditional values.

“We are well placed to withstand any near term downturns whilst remaining focused on implementing our growth plans,” he added.

The board has also declared a final dividend of 9.15p per share, which will be paid to shareholders on 10 March next year.