The head of Brewin Dolphin has explained why he plans to take on more financial planners, despite admitting it was “tough” to find good ones.
Brewin Dolphin reported an 11.5 per cent jump in income for its financial planning arm for the year ending 30 September, hitting £17.5m from the £15.7m reported in 2015.
The firm’s chief executive David Nicol claimed it was partly driven by clients having more financial complications in their lives.
He said a third of the new funds coming into the company from the direct business was on an integrated basis, meaning clients were asking for financial planning to be attached to the discretionary fund management service.
Mr Nicol said Brewin Dolphin was looking to grow the financial planning part of the business, and will continue to hire both advisers and paraplanners.
“It’s a tough market to find good financial planners because there are a lot of people who need advice,” he said, pointing out that many banks and insurers have pulled out of the advice industry and so stopped training people.
“We are also doing a lot of internal training as well, because we think training our own financial planners will be a better way of growing the service over the long-term.”
He said there had been a lot of interest in financial planners coming to work for Brewin, which he said was largely because of the firm’s scale and brand.
“It’s difficult because it is a very competitive market, but we think we are well positioned to take advantage of it."
This comes as the firm's results, published yesterday (30 November) revealed the firm's statutory pre-tax profits had fallen to £50.1m, from the £61m posted at the same point last year.
Total reported income had remained flat for the year ending 30 September, hitting £282.4m from the £283.7m posted at the same point last year.
Brewin’s finance director Andrew Westenberger said the company’s last substantial reduction of its non-core business caused a “drag effect” on its income.
He said his was largely because the company had stopped offering its old advisory business to new clients three years ago.
Rather than managing funds on a discretionary basis, the advice business required a far more “intensive” level of communication because clients had to be told before carrying out any investment decisions, he said.
“This was far more costly for us to operate and equally more risky for us to ensure we deliver the right outcome for clients.
“It is a service which was quite prevalent for wealth managers five or 10 years ago but is now becoming far less common.”
Mr Westenberger also pointed to the new regulatory rules coming in under Mifid II which will make operating advisory services even more costly and difficult.
Brewin’s advisory business has been “gradually declining” over the years, he said, pointing out that a “fair amount” of these clients are converting onto the discretionary service.
