Brewin Dolphin in mood for growth despite profits dip

Wealth manager Brewin Dolphin has flagged ambitious growth plans despite first-half profits falling against a backdrop of challenging markets.

Brewin Dolphin chief executive David Nicol. Picture: Contributed

David Nicol, chief executive of the firm, which employs around 190 client-facing staff across its four offices in Scotland, said the company was now in “hiring mode” as it looked to increase the discretionary funds it oversees for financial advisers by a third over the next five years from the £25.9 billion it currently manages.

A restructuring of the business, which saw its regional office network rationalised, has now been completed and the firm is actively recruiting investment managers and financial planners.

The impact of the restructuring, along with difficult market conditions, took their toll, with total income falling 4.3 per cent to £137.2m in the six months to 31 March and adjusted profit before tax coming in at £28.4m, down by 12.3 per cent. But total funds at the end of the period stood at £32.8bn, up 2.5 per cent against the end of the last financial year and Nicol said it had been a “creditable performance”.

“The underlying ability of the business to sustain organic growth, despite the poor market environment, is a reminder of the sound footings on which we are building our growth ambitions,” he said.

Nicol said that the firm, which operates Scottish offices in Edinburgh, Glasgow, Aberdeen and Dundee, was looking to increase its client-facing UK workforce of around 400 by some 5 per cent a year to take advantage of opportunities it sees.

He also said the firm had seen little impact from the oil price downturn on its Aberdeen office although it had seen a number of employees from the sector who had been made redundant seeking advice on how to invest their redundancy payments.

Although the wealth management sector is continuing to see consolidation, with Tilney Bestinvest recently agreeing to buy rival Towry, Nicol said the firm was not actively pursuing opportunities.

“We do get approached about potential deals and we will look at things if they make sense but we are a big, well-capitalised firm with plenty of growth opportunities within our own business.”

Brewin Dolphin recently developed and “soft launched” two wealth management services – one for family lawyers and their clients and another for corporate advisers and their clients.

Noting that the share price has traded at around the same level for the past couple of months, analysts at Shore Capital said they were slightly surprised that none of the listed discretionary fund managers had reacted more positively to the “eye-wateringly high valuation reference set by the recent Bestinvest offer for Towry”.

Shares in Brewin Dolphin fell by 7 per cent, or 19.3p, to close at 256.5p yesterday.