Brewin MPS flows slow despite shake-up

Brewin Dolphin has seen flows into its managed portfolio service (MPS) slow despite announcing earlier this year that it would be cutting costs by between 17% and 27%.

In January, the wealth manager said it would slash fees by switching to a segregated mandate structure from its current pooled retail funds model.

Net flows into the wealth manager’s MPS reached £300m in the six months to 31 March 2018, taking total funds under management from £1.8bn to £2.3bn. However, this was lower than the £500m net flows its MPS attracted between March and September 2017.

Over the last 12 months, total funds in its MPS have grown 44%.

Still, Brewin Dolphin saw its adjusted pre-tax profit increase 19.8% to £38.8 from £32.4m, supported by net new inflows of £1.3bn. This saw assets in the firm’s discretionary funds arm grow 1.5% to £34.3bn.

The wealth manager also reported its intermediary service attracted circa £900m, with net inflows into its bespoke discretionary service up 50% to £600m.

The trading update said: “We have seen increasing demand for our bespoke discretionary services in relation to advice around pensions freedoms, leading to an increase in our average new case size of 22%.

“We have also successfully completed the transition of the relevant assets within our MPS portfolios into our four new manager of manager funds, which has significantly reduced the cost of ownership for all clients, as we leverage our scale with asset managers.”

Meanwhile, total funds under management (FUM) dropped from £40.1bn to £39.7bn over the period as net flows were offset by lower investment returns.

Since then FUM have increased and were at £41bn as of 30 April 2018.

Chief executive David Nicol (pictured) said: “I am pleased to report a robust first half of our financial year with strong net discretionary inflows, despite challenges in the wider market.

“We remain positive in our outlook and confident in the strength and increasing relevance of our advice-led service.”

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