In a trading update today, the wealth management and Chartered Financial Planning group said that cost discipline and strong client and Financial Planner relationships enabled the group to have a positive quarter despite market volatility and economic uncertainty caused by the Coronavirus pandemic.
The quarter represents the fourth of Brooks Macdonald’s financial year. For the full financial year funds under management increased by £0.5bn (4.1%).
The acquisition of Cornelian Asset Managers added assets of £1.2bn, but the addition of this was offset by net outflows of £0.8bn. According to the trading update this “reflected the effect of outflows of mainly lower margin business as a result of the group’s focus on efficiency and business quality over volume and the actions taken to support medium term value creation.”
Integration of Edinburgh-based Cornelian, the £31m acquisition of which was completed in February, has seen the business now embedded within Brooks Macdonald. In the trading update, the company said that it expects the target full year 2021 cost synergies of £3.75m to be met in full.
In this latest trading update it said that it expects the acquisition to add an additional £1bn in funds under management to the business. The acquisition is expected to complete by the end of 2020.
The growth in funds under management was primarily achieved by strong investment performance which was 12.5%.
The UK investment management arm saw particularly strong growth. Funds under management in the Bespoke Portfolio Service increased 11.4% to £8.2bn. The Managed Portfolio Service grew by 17.6% to £1.8bn with particularly strong flows from the Platform MPS product.
Net outflows for the UK investment management were £0.1bn (3.5%).
The international business recorded improved flows during the quarter and closed the quarter with £1.6bn of funds under management.