JM Finn’s profits weathered a challenging 2022, growing nearly 3% despite market conditions inflicting a £1.4bn fall in funds under management and administration (FUMA).
The wealth manager’s preference for growth names meant its client portfolios underperformed on a relative basis in the year to 31 December, returning 3.6 percentage points lower than the MPI GBP Medium Risk Index.
The annual report maintained that over the three and five years to that date, the average performance of its portfolios remained net positive.
The difficult market conditions in 2022 were reflected by a drop-off in net flows into the firm’s discretionary arm, which halved to £160m.
Discretionary funds under management ended the year at £8.4bn, down from £9.7bn at the end of FY2021. This left total FUMA at £10.3bn, down 13% year-on-year.
Despite the loss of funds, and the resultant reduction in fee revenue, total revenues were broadly flat thanks to a strong contribution from elevated interest rates. In all, revenues fell only £0.7m, or less than one per cent.
CEO Hugo Bedford (pictured) praised tight cost controls in helping to lift profits to £8.5m.
Looking ahead, Bedford said the UK economy and the stock market as a whole had made an encouraging start to 2023, but added: “Economic conditions remain unsettled however and rising rates have made cash more competitive.”
Chairman Steven Sussman said the firm was “cautiously optimistic” about the year ahead, but also warned of further volatility.
In March JM Finn relocated its Yorkshire base to York from Leeds.
See also: JM Finn hires investment manager from Atomos Wealth