Brooks Macdonald ends fourth quarter in line with guidance

Brooks Macdonald Group reported a 7% increase in funds under management over its financial year in an update on Wednesday, reaching £18bn, with full-year results expected to align with market expectations.

The AIM-traded firm said that in the fourth quarter, it saw net outflows of £0.2bn, an improvement from the prior quarter.

Positive investment performance, however, more than compensated for the outflows, resulting in closing funds under management of £18bn, up from £17.9bn at the end of March.

Group gross inflows reached £623m in the fourth quarter, marking the highest inflow for any quarter in the financial year and reflecting strong client demand for the group’s broad proposition set.

The Platform Managed Portfolio Service (MPS), including the group's B2B offering for financial advisers, BM Investment Solutions (BMIS), grew to £4.4bn from £4.2bn at the end of March.

That segment achieved an annualised organic net new business growth of 13.0% of opening funds under management.

However, the Bespoke Portfolio Service (BPS) experienced net outflows of £0.2bn, or 7.1% on an annualised basis, though that was an improvement from the 9.6% outflow rate in the prior quarter.

Notably, BPS gross inflows increased by 33.1% as clients added funds to the group’s specialist products.

Investment performance for the quarter was strong at 1.4%, surpassing the benchmark which rose by 1.1% during the same period.

For the full financial year ended 30 June, Brooks Macdonald experienced net outflows of £0.6bn, or 3.7%, consistent with the group’s guidance.

Investment performance contributed £1.8bn, leading to an overall growth in closing funds under management of 7%, up from £16.8bn at the start of the financial year.

The group reported solid trading performance in the second half of the year, and anticipated its full-year results to be in line with market expectations.

“We remained dedicated to serving our clients in a changing economic environment,” said chief executive officer Andrew Shepherd.

“This focus resulted in strong gross inflows, with high demand for wealth management services that provide solutions through the entire investor lifecycle.

“Outflows have remained elevated but with a more certain political backdrop, lower inflation and the increased likelihood of a reduction in interest rates, we anticipate that these will moderate.

“We will stay focused on meeting our clients' investment needs.”

In June, Brooks Macdonald announced the retirement of group CEO Andrew Shepherd and the appointment of Andrea Montague as his successor, effective from 1 October, pending regulatory approval.

The group said it planned to report its full-year results and the outcome of the strategic review of its International business on 12 September.

At 1201 BST, shares in Brooks Macdonald Group were down 2.96% at 1,970p.

Reporting by Josh White for Sharecast.com.