Brewin Dolphin increased its funds under management 5.1% during the year ended 30 September despite net flows in its discretionary funds falling.
The firm’s preliminary results for the year, published on Wednesday, revealed firm’s total funds under management increased to £45bn, from £42.8bn in 2018.
Discretionary funds hit £40.1bn, up from £37.6bn in 2018. This included £300,000 of assets from the acquisition of Bath-based IFA Epoch Wealth Management announced in April.
But net discretionary fund flows were £1.4bn in 2019 compared with £2.3bn in 2018. This represented a growth rate of 3.7% compared with 6.8% the previous year.
The firm said this was a “resilient result considering market conditions”.
Spending on growth and infrastructure projects hits profit
Profit before tax and adjusted items was 3.2% lower in 2019 than the year before, dropping from £77.5m to £75m. Brewin said this was “in-line with expectations”.
Total costs jumped 5.3% from £252.3m in 2018 to £265.7m due to “planned spending on growth initiatives and infrastructure projects”. It said capital expenditure of £15.3m was significantly higher than 2018’s £8.2m as a result of the infrastructure spend.
Brewin made three acquisitions during the year – including Epoch – which it said are expected to add £7m in profit before adjusted items and tax for 2020.
The results also alluded to the “significant investments” in its technology infrastructure including its new client management system, Client Engage, expected to be delivered in spring 2020 and the £35m overhaul of its custody and settlement system.
‘Foundations for long-term growth’
Brewin Dolphin chief executive David Nicol (pictured) said he was “very pleased” with the financial performance, particularly over the second half of the year.
He said: “The group has continued to deliver strong and resilient organic growth, against the continued uncertain economic and political backdrop. This is demonstrated by the strength of our discretionary funds flows. Our strategy of focusing on our advice-led wealth management service continues to deliver results.
“We continue to invest in our business to support future long-term growth. We have completed and integrated a number of strategic acquisitions and the replacement of our core custody and settlement system is on track. These initiatives are laying the foundations for long-term growth and will ensure that we are well placed to capture future market opportunities.”
