Brewin Dolphin has announced a trading update for the three months ended 30 June 2020, with total discretionary net flows of £0.4bn, an annualised growth rate of +4.5%.
The London Stock Exchange listed financial services outlet - one of the largest British investment management and financial planning firms with 33 offices throughout the UK, Jersey and Ireland - said in a statement announcing its latest quarterly results that, "continued resilient performance" in Q3, supported by market recovery and organic growth, has helped deliver results "despite the challenges that the covid-19 pandemic brought".
Robin Beer, who took over as chief executive at Brewin Dolphin plc in June , said: "I am incredibly proud and honoured to work for a group which has not faltered through the covid-19 crisis. Our people have continued to deliver on complex infrastructure projects, and our client-facing colleagues have gone above and beyond to support their clients whilst also securing new business.
We are delivering on multiple infrastructure projects despite the challenges of remote working," Robin Beer, CEO Brewin Dolphin
"Overall funds increased by 12.8% in the quarter as markets recovered. We had another strong quarter of net inflows across both our direct and intermediaries' channels, with an annualised growth rate in total discretionary net flows of 4.5%, demonstrating continued demand for our services and the effectiveness of our people and operations.
"We are delivering on multiple infrastructure projects despite the challenges of remote working," he added.
The company confirmed that David Nicol will leave the company to retire at the end of July, and Beer praised him as having been "instrumental" in driving and expanding the business over the last seven years.
"His strong leadership has smoothed the transition period, allowing for continued business momentum, and we wish him well in his retirement."
Beer added that the company will move to a new client management system following testing and remote training of employees, while, in response to covid-19 the company has continued to review its office operations and have re-opened a number of small offices on a "controlled basis", prioritising employee's and clients' health and safety and ensuring consistency with government's guidelines.
"We anticipate that our larger offices will take longer to reopen fully," added Beer. "We have also reassessed the impact and potential risk on the next phase of our custody and settlement implementation programme, which requires rigorous testing of the new system interfaces with existing technology and remote training for employees.
"To mitigate any execution and training risk we have pushed back the implementation of the system to the first half of the 2021 calendar year," he said.
Result highlights include:
- Total funds increased by 12.8% to £46.7bn in the quarter (Q2 2020: £41.4bn), with discretionary funds up 13.7% to £40.6bn (Q2 2020: £35.7bn) driven by improved investment performance and robust inflows. Total funds include £2.7bn of acquired funds following the acquisition of Investec Capital & Investments (Ireland) Limited ("ICIIL") in Q1 2020.
- Q3 discretionary net flows of £0.4bn, +4.5%* (Q2 2020: £0.4bn, +3.8%*, Q1 2020: £0.1bn, +1.0%*).
- Strong direct discretionary inflows of £0.4bn, similar levels to Q2. Year to date direct discretionary net flows was negatively impacted by the departure of a low margin institutional account in Q1.
- Total income was £92.7m (Q3 2019: £87.3m), an increase of 6.2% year on year, driven in part by higher commissions due to elevated trading activity and income from recent acquisitions of £5.2m. Year to date total income was £268.5m, an increase of 7.6% year on year.
- Total discretionary income increased by 3.8% to £79.1m (Q3 2019: £76.2m) due to higher commissions. Year to date total discretionary income grew by 5.4% to £228.6m.
- Financial planning income grew 15.3% to £8.3m (Q3 2019: £7.2m), driven by continued demand for integrated services and recent acquisitions. 60% of new direct discretionary private client business took advice-led services in the quarter.
The preliminary results for the year ended 30 September 2020 and a strategy update will be announced on 25 November 2020.
* Annualised growth rate.