Brewin Dolphin reports record gross discretionary inflows

Brewin Dolphin reported record gross discretionary fund inflows in its third quarter on Friday, at £1.3bn, rising from the £1.0bn it recorded for the second quarter.

The FTSE 250 wealth manager said that was driven by continued growth across both its direct and indirect businesses.

It said over 70% of gross discretionary fund inflows, excluding MPS and Voyager, were from new clients, with the rest coming via top-ups from existing clients.

Ireland contributed to around a quarter of its gross direct inflows in the three months ended 30 June, excluding transfers relating to Brexit, while the company’s Voyager funds grew by just over £100m, taking its total funds to around £250m.

Discretionary net flows totalled £0.7bn, making for an annualised growth rate of 6.1%, compared to £0.5bn and 4.5% in the prior quarter.

The board said that figure demonstrated the value in its “advice-focused strategy” and range of propositions.

Total funds increased 6.5% to £56.0bn quarter-on-quarter, with discretionary funds advancing 6.6% to £48.7bn, supported by continued strong net flows and improved investment performance of 5.0% in the quarter, outpacing the MSCI PIMFA Private Investor Balanced Index, which rose 4.3%.

Total income was £103.8m, up 12% year-on-year, which was driven by higher market performance and strong fund net flows.

Year-to-date total income was £303.7m by the end of the quarter, making for an increase of 13.1% year-on-year.

Total discretionary income was ahead 8.3% to £85.7m, and year-to-date total discretionary income grew 11.5% to £255.0m.

Discretionary commission income was £16.5m, which was lower than “elevated levels” in the second quarter, as the board had expected.

In the quarter, the firm reported a one-off corporate transaction in Ireland which contributed £1.7m of advisory commission income.

Financial planning income grew 28.9% to £10.7m, driven by both investment performance and continued demand for ongoing financial planning advice.

Brewin Dolphin said its new custody and settlement system 'Avaloq' remained on track to go live in the autumn.

It said it was working towards a “phased deployment of functionality” once Avaloq was live within its technology environment.

There was no change to our full-year capital expenditure guidance for Avaloq of £24m, with the board explaining that as Avaloq was embedded into the firm’s technology architecture, it would be able to drive cost benefits through improved operational efficiencies, capacity, and capability.

“We are very pleased to announce a second consecutive quarter of record gross discretionary fund inflows of £1.3bn, of which over 70% were from new clients,” said chief executive officer Robin Beer.

“Strong fund inflows were seen across both our direct and indirect businesses, with Ireland having an exceptional quarter and our Voyager fund range continuing to scale at pace.”

Beer noted that the company was in “the final stages” of implementing its custody and settlement system, remaining on track for it to go live in the company’s environment in the autumn.

“These results are testimony that we are delivering on our strategic priorities of innovating our propositions, expanding our distribution channels and accelerating our digital agenda, and we are well positioned to capture future growth.”

Brewin Dolphin said it would release its preliminary results for the year ending 30 September on 24 November.

At 0845 BST, shares in Brewin Dolphin Holdings were up 1.84% at 359.5p.