Brooks Macdonald: A model for growth

SPONSORED BY : Brooks Macdonald

By Sam Shaw

Added 1st July 2016

Brooks Macdonald has been developing its proposition for international advisers for the past three years. Richard Hughes discusses how its consultative approach has led to the development of significant adviser partnerships across key jurisdictions.

Brooks Macdonald: A model for growth

Can you provide an overview of your business with regard to the way you work alongside independent financial advisers?

In the UK, Brooks Macdonald has a long-standing relationship with professional advisers. The company celebrates its 25th anniversary this year and have been working alongside the adviser community continually since then.

Yet our international business is a fairly recent development; we have been focused on the international professional adviser sector for the past three years following an acquisition in 2012.

Based in the Channel Islands, our international team comprises 75 people, including 25 qualified investment managers.

From here we work with a variety of wealth intermediaries – including independent financial advisers – across our key jurisdictions: South Africa; the UAE; and Europe, where we are active in the popular expat countries, including Spain, Portugal, Malta, Cyprus and Switzerland.

We also work closely with our colleagues in the UK, due to the high levels of international business that is transacted there, particularly in London

We currently manage approximately £8bn of assets across the group. Of that £8bn, over 80% is introduced to us by independent advisers. We clearly recognise that when it comes to servicing the financial needs of the high net worth and mass affluent clientele there are two distinct roles: the holistic financial planning and risk assessment; and the ongoing management of the investment assets and savings.

How can Brooks Macdonald demonstrate its commitment to servicing the international professional adviser community in a world of increasing vertical integration and consolidation?

We see the role of the professional adviser as very clear and distinct. The terms of the relationships we establish with professional advisers and what can be expected from each party are laid out very clearly from the outset.

Our respect for the relationship the adviser has with the client is evident in the fact that over 80% of Brooks Macdonald’s assets under management have been introduced to us by professional advisers. As a result we have a huge focus on servicing the interests of advisers. Our service proposition for advisers aims to look at the adviser’s holistic requirements, and aims to understand each individual business in order to offer a bespoke proposition.

What options are available for clients wishing to access your services?

We offer three core options: a range of four Multi-Asset Funds that represent different risk profiles; a Managed Portfolio Service for clients with £25,000 or more to invest; and a Bespoke Portfolio Service for those with at least £500,000. We also offer investment options for clients preferring to invest directly in stocks or bonds, including an income-producing direct corporate bond strategy and a direct equity mandate. Like our core investment options, these can be tailored to the risk profile of the client.

Our fees and charges are designed to be transparent and competitive. We work with advisers to agree a fee model that works for them and complies with the relevant regulatory environment, which can be a share of AMC within a fund structure, or a distinct adviser fee for discretionary accounts.

How are you working with the different providers? What initiatives have you been working on recently?

We have been making efforts to put in place links with all the major players in life and pensions, but are also working on bespoke product initiatives.

For example, late in 2015, Brooks Macdonald International negotiated a deal with Generali PanEurope, making its discretionary investment services available to clients in Portugal through the insurer’s offshore bond, the Private Wealth Portfolio.

Earlier this year, we established a deal with Momentum Pensions, offering its investments through the provider’s Qrops Superlite and Sipp Lite schemes across its primary jurisdictions.

How do you see things evolving, given the various external influences affecting the industry, such as regulation?

Regulation and the influence it has over advisory models changes from place to place. Whether it’s been the RDR in the UK or South Africa, specific changes affecting the Middle East, or Mifid in Europe – regulation tends to force a period of change, demanding that advisers reassess the way they manage their clients’ investments.

We keep a close eye on developments. We’re seeing a trend towards vertical integration from some of the larger players, such as Old Mutual, or St James’s Place, buying up adviser or support services businesses.

We currently work with just shy of 100 international firms, and while we are always identifying new firms we believe are suitable for us to work with, it’s more about developing  meaningful relationships with advisers, rather than going for a quantum number of firms.

Similarly, we are more interested in developing a stronger presence in those markets in which we already operate, rather than moving into new jurisdictions; but we will be responsive to opportunities.

We will continue to work with professional advisers on a consultative basis, forming strategic partnerships, but independence will be our core strength.



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