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Brooks Macdonald cuts costs as market turmoil bites

Brooks Macdonald cuts costs as market turmoil bites

Brooks Macdonald has gone on a cost cutting drive as market conditions put pressure on revenue.

In a half year trading update released to the stock market this morning (24 January) Brooks Macdonald reported a drop in assets under management (AUM) from £12.4bn in June 2018 to £11.9bn at the end of December.

The company said this drop was due to adverse stock market conditions, which cost the firm just over £1bn of inflows in the final three months of the year.

Brooks Macdonald reported net inflows of £83m in the final quarter of the year.

Profits were likely to be in line with previous forecasts, the company said, but revenues are under "short-term pressure" and the company said it would respond to this by "streamlining" the business.

During the course of the past six months, Brooks Macdonald completed the sale of its employee benefits business to Brunsdon Employee Benefits.

Caroline Connellan, the company's chief executive, said: "We had a good first half notwithstanding December when both markets and client sentiment became weaker as a result of the macroeconomic and political uncertainty.

"We have continued to implement our strategy, driving for medium-term margin improvement and building a scalable operating platform.

"The fundamental opportunity for our business remains strong. I am confident that the strength of our client and adviser relationships, coupled with the investment we are making in our offering, position us well to capture future growth.

"The efficiency measures that we recently announced combined with ongoing cost discipline will help deliver greater value from this opportunity."

david.thorpe@ft.com