Brooks Macdonald today (17 April) said the strategic review of the international operations across its three crown dependency jurisdictions was “progressing” as it reported the group’s total funds under management grew by 2.0% to £17.9bn in the three months ended 31 March this year.
In the update for the third quarter of its financial year, Andrew Shepherd (pictured), CEO of Brooks Macdonald said: “The strategic review of the Group’s International operations is progressing and we will communicate the outcome later this year.”
Across the group, he said the rise in FUM in part reflected markets responding to the improving macroeconomic outlook.
“We have also seen encouraging flows in our Platform MPS and specialist BPS propositions demonstrating continued demand for our broad product range.
“However, interest rates are still high, placing continuing pressure on our clients, and we remain focused on meeting their needs through our innovative solutions and excellent client service.
“I remain confident in our future opportunity, and I want to extend my appreciation to all our stakeholders for their ongoing support, and to everyone at BM in particular for their unwavering commitment to our clients.”
During the quarter ended 31 March 2024, the Group’s closing FUM increased by 2.0% to £17.9 bn (31 December 2023: £17.6bn).
Gross inflows were £0.5bn , whilst gross outflows continued to be elevated given the prevailing macroeconomic backdrop of high interest rates and inflation, reaching £0.8bn in Q3.
This resulted in overall net outflows for the quarter of £0.3 billion or 1.7%. Positive investment performance in the quarter of £0.6 billion or 3.7%, more than offset net outflows and contributed to the increased FUM.
Brooks Macdonald further cited that platform MPS, including the group’s B2B offering for financial advisers, BM Investment Solutions (BMIS), grew to £4.2bn with net new business of 1.7% of opening FUM.
BPS experienced net outflows in the quarter of £0.2bn or 2.3%, as clients continue to withdraw funds to repay debt or hold higher cash balances in the current interest rate environment.
Within UK BPS, its decumulation specialised product grew by 9.0% in the quarter, offering a solution to meet clients’ income requirements by shielding their portfolio from downturn in the early years of withdrawal.
Investment performance for the quarter was 3.7%, slightly below the benchmark1 which increased by 4.4% in the period, the difference it said “driven by the predominance of clients of a lower risk profile in our book than the benchmark and therefore a higher allocation to bonds which underperformed equities in the quarter”.
As for the outlook, for underlying profit for the year it remained in line with market expectations, Brooks Macdonald said adding that “in the second half, we will continue to realise the cost benefits of the organisational changes announced in October 2023 while retaining a focus on operational excellence.
“Demand for our products and services remains positive, particularly in our specialised BPS products and Platform MPS, which is reflected in our gross inflows. However, given the persistence of current trends in the market and client behaviour, in line with previous guidance, the Group expects net outflows for the full year.”
Analysis of FUM net flows by service over the quarter
| Quarter to 31 March 2024 (£m) | ||||||
| Opening FUM
1 Jan 24 |
Organic net new business | Investment performance in the period | Closing FUM
31 Mar 24 |
Organic net new business | Total mvmt | |
| BPS | 8,812 | (205) | 306 | 8,913 | (2.3)% | 1.1% |
| MPS Custody | 970 | (20) | 39 | 989 | (2.1)% | 2.0% |
| MPS Platform | 3,930 | 65 | 169 | 4,164 | 1.7% | 6.0% |
| MPS total | 4,900 | 45 | 208 | 5,153 | 0.9% | 5.2% |
| UKIM discretionary | 13,712 | (160) | 514 | 14,066 | (1.2)% | 2.6% |
| Funds | 1,652 | (112) | 47 | 1,587 | (6.8)% | (4.0)% |
| UKIM total | 15,364 | (272) | 561 | 15,653 | (1.8%) | 1.9% |
| International | 2,215 | (22) | 81 | 2,274 | (1.0)% | 2.7% |
| Total | 17,579 | (294) | 642 | 17,927 | (1.7)% | 2.0% |
| Total investment performance | 3.7% | |||||
| MSCI PIMFA Private Investor Balanced Index1 | 4.4% | |||||
Analysis of FUM net flows by service over the nine months
| Nine months to 31 March 2024 (£m) | |||||||||||
| Opening FUM | Organic net new business
|
Total Inv. Perf. | Closing FUM
|
Organic net new business | Total mvmt | ||||||
| 1 Jul 23 | Q1 | Q2 | Q3 | Total YTD | YTD | 31 Mar 24 | YTD | YTD | |||
| BPS | 8,527 | (98) | (94) | (205) | (397) | 783 | 8,913 | (4.7)% | 4.5% | ||
| MPS Custody | 966 | (14) | (21) | (20) | (55) | 78 | 989 | (5.7)% | 2.4% | ||
| MPS Platform | 3,489 | 147 | 121 | 65 | 333 | 342 | 4,164 | 9.5% | 19.3% | ||
| MPS total | 4,455 | 133 | 100 | 45 | 278 | 420 | 5,153 | 6.2% | 15.7% | ||
| UKIM discretionary | 12,982 | 35 | 6 | (160) | (119) | 1,203 | 14,066 | (0.9)% | 8.4% | ||
| Funds | 1,708 | (78) | (71) | (112) | (261) | 140 | 1,587 | (15.3)% | (7.1)% | ||
| UKIM total | 14,690 | (43) | (65) | (272) | (380) | 1,343 | 15,653 | (2.6)% | 6.6% | ||
| International | 2,157 | (27) | (33) | (22) | (82) | 199 | 2,274 | (3.8)% | 5.4% | ||
| Total | 16,847 | (70) | (98) | (294) | (462) | 1,542 | 17,927 | (2.7)% | 6.4% | ||
| Total investment performance | 9.2% | ||||||||||
| MSCI PIMFA Private Investor Balanced Index1 | 10.3% | ||||||||||
Analysis of FUM gross flows by service over the nine months
| Nine months to 31 March 2024 (£m) | |||||||||||||
| Organic gross inflows | Q3 vs Q2 | Organic gross outflows | Q3 vs Q2 | ||||||||||
| Q1 | Q2 | Q3 | Total YTD | Inc/(dec) % | Q1 | Q2 | Q3 | Total YTD | Inc/(dec) % | ||||
| BPS | 192 | 173 | 139 | 504 | (19.7) | (290) | (267) | (344) | (901) | 28.8 | |||
| MPS Custody | 15 | 15 | 19 | 49 | 26.7 | (29) | (36) | (39) | (104) | 8.3 | |||
| MPS Platform | 276 | 317 | 282 | 875 | (11.0) | (129) | (196) | (216) | (541) | 10.2 | |||
| MPS total | 291 | 332 | 300 | 924 | (9.6) | (158) | (232) | (255) | (645) | 9.9 | |||
| UKIM discretionary | 483 | 505 | 439 | 1,427 | (13.1) | (448) | (499) | (599) | (1,546) | 20.0 | |||
| Funds | 55 | 52 | 56 | 163 | 7.7 | (133) | (123) | (169) | (424) | 37.4 | |||
| UKIM total | 538 | 557 | 495 | 1,590 | (11.1) | (581) | (622) | (768) | (1,970) | 23.5 | |||
| International | 44 | 34 | 38 | 116 | 11.8 | (71) | (67) | (60) | (198) | (10.4) | |||
| Total | 582 | 591 | 533 | 1,706 | (9.8) | (652) | (689) | (828) | (2,168) | 20.2 | |||
