‘Benign’ markets help drive Brewin Dolphin profits up 37%

By ERIKKA ASKELAND
Published on 06/12/2012 00:00

INVESTMENT manager Brewin Dolphin grew profits by 37 per cent last year to £29.9 million as it benefited from benign markets and firm customer demand.

The company enjoyed a jump in assets under management from £24 billion to £25.9bn, with discretionary funds - a more profitable business - rising 16.7 per cent to £18.2bn in the year to the end of September.

But analysts at Shore Capital predicted that the company would “see client assets continue to leave” over coming months under fee rate increases brought in ahead of changes in financial advisory services under the Retail Distribution Review (RDR).

The company grew RDR-ready fees from £160.7m to £182.6m as commissions, which will be banned as of 1 January, fell to £86.9m from £103.4m

Chairman Jamie Matheson said that the RDR change gave the larger businesses such as Brewins “significant competitive advantages”.

The firm said that it will spend an additional £17m on it new IT systems, bringing the cost of creating its “fit for 
purpose” system to a total of £49.1m.

The company proposed a final 3.6p per share dividend, bringing the full year divi to 7.15p compared to 7.1p last year.

Marc Wilkinson, head of Brewin Dolphin in Edinburgh, said: “It has been another difficult year for the economy but the markets have held up very well and we are pleased to have made good progress in Edinburgh and contributed to the group’s increased profits and increased funds under management.

“The industry is going through some significant changes and both my colleagues here and our clients are managing this very well. I believe we are set fair to grow the business in the coming year.”