According to the group’s interim management statement, it saw net outflows from advisory services of £400m in the third quarter “as a result of the final phase re-pricing and service review”. But, it added, this increase in outflows was anticipated and said £100m was successfully converted to discretionary service.
Within Brewin’s ‘core’ discretionary investment management service, reported inflows of £1.1bn, which represents a 7% annualised growth rate year-to-date and an “external organic growth rate of 5%”.
This Brewin Dolphin said: “is in line with our long term target with an additional 2% annualised growth from the successful conversion of funds from advisory services”.
Discretionary funds under management now represent 81% of the firm’s total managed/advised funds, up from 76% on 29 September, 2013.
On the execution side of the business, funds held rose 10% to £7.4 billion, benefitting the group said, from £600m of transfers from other services, in particular advisory dealing.
Total income for the period was roughly flat at £73.1m, while core fee and commission income rose 5% to £67m.
Other income, however, fell 36%, primarily it said, as a result of “the on-going planned reduction in "trail income" post RDR and declining margins on cash deposits”, Brewin Dolphin said.
The decline in commission income over the quarter, which the firm said was in line with industry trends, resulted in a slow-down in core income growth, while it said transactional volumes were lower both as a result of seasonal factors and lower market volatility.
Year to date, core income is up 10% from £182.3 million in 2013 as a result of increased funds under management and, the move onto new standard national pricing structures. Commission income has fallen by 2% year on year due, as discussed above, to lower trading volumes and market volatility.
