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Brooks Macdonald caveats funds boost with margin squeeze

Brooks Macdonald caveats funds boost with margin squeeze

Discretionary investment firm Brooks Macdonald has reported higher funds under management in the second half of last year, but said  pressure on fees has dented margins.

Brooks reported a 12.3 per cent increase in (FUM) for the six months to 31 December 2017, putting the money it manages at £11.7bn, compared with £10.5bn at the end of June 2017.

But in a trading update issued to the market this morning (24 January) the company said:the revenue generate by higher FUM over the period has been offset, partly by lower yields.

"This is principally due to continued movements in product mix, the competitive environment including the ongoing shift towards all-in fees, and reduced transactional income against a background of lower market volatility in the period," it said.

"Further, we have continued to invest in our regulatory change agenda (in particular, MiFID II and GDPR), as previously disclosed.”

The company said when it reports its half year results on 14 March 2018, the numbers will include a cost for investment in technology that the firm has made.

Caroline Connellan, chief executive of Brooks Macdonald, said: “We continue to make good progress with our planned investment in our operational and risk management framework to build a stronger, sustainable platform for the business.

"This will enable us to take full advantage of the significant growth opportunities open to us, whilst enhancing efficiency and delivering improved operating margins in the medium term.”

David.Thorpe@ft.com

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