UK-headquartered wealth firm Brooks Macdonald reported an overall positive performance for the year ended 30 June 2022.
Despite group funds under management (FuM) suffering a 4.8% fall from the previous year to £15.7bn ($18.2bn, €18.1bn), it had positive net flows throughout the 12-month period of 4.8% representing a £1.1bn improvement from 2021.
Group revenue increased by 3.4% to £122.2m, largely driven by higher average FuM and the full year impact of the acquisition of Lloyds’ Channel Islands business – which it purchased in June 2020 for £10m.
Both the UK investment management business and model portfolio service saw continued rapid growth, with the IM arm more than doubling its FuM and the MPS experiencing 34.4% net flows.
The international arm reported a 19.3% rise in revenue to £20.4m for FY 2022 from £17.1m a year before. However, there was a dip in the international operation’s funds under management to £2.22bn on 30 June 2022 from £2.51bn on 1 July 2021.
The one-year-old Isle of Man office is expected to be a source of growth for the international arm alongside its referral agreement with Lloyds Bank.
M&A
Brooks Macdonald also said that the recent acquisition of IFA firm Integrity Wealth Solutions, still subject to regulatory approval, will bring further scale to the business.
Chief executive Andrew Shepherd, who has been at the helm for just over a year, said he expects the Integrity deal to receive regulatory approval and complete by the end of the year.
The acquisition is one of the “building blocks” in Brooks’ M&A agenda as it will help the company gain “deeper insight into the products and services an IFA firm values from a discretionary fund manager”, following continued adviser demand for outsourced investment management solutions.
In terms of acquisition strategy, Shepherd said Integrity was “one of a number of M&A discussions and going forward we expect further acquisitions”.
There are no plans for Brooks to become a consolidator, he added, but the business is “keen to give the opportunity to successful financial advisers to join a larger wealth management company”.
Shepherd continued: “This has been another strong year for Brooks Macdonald – we’ve delivered higher net flows, we’ve hit another record for underlying profit margin, and we’ve increased our full year dividend for the seventeenth consecutive year.
“We have made good progress in driving our digital transformation forward, having now gone live with our remaining client- and adviser-facing processes on the SS&C platform. This will make Brooks Macdonald increasingly easy to do business with, delivering a best-in-class adviser experience and client service.
“Our clients and advisers are facing a challenging macroeconomic and market environment and, as ever, we will support them through these difficult times. Nonetheless, the fundamental long-term opportunity for Brooks Macdonald remains strong despite these challenges. We have momentum, we have an ambitious growth strategy and we have a strong team with the capabilities to take full advantage of the opportunities ahead.”
