Brewin Dolphin is “in hiring mode”, despite reporting a 42 per cent drop in its profits, as it completes restructuring to a discretionary wealth management focus.
In its half-year results, published today, the wealth manager saw profits before tax falling to £21.5m from £37.2m in the six months ending 31 March 2016.
Adjusted profit before tax also fell by 12.3 per cent compared to the same period last year, down to £28.4m from £32.4m.
The drop was mainly attributed to lower “other income”, which dropped 39.7 per cent due to outflows from the firm’s advisory business as the company shifts its focus to discretionary wealth management services.
Brewin Dolphin chief executive David Nicol says: “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.”
“The group is in hiring mode and focused on a balance of direct and intermediary-led growth to increase discretionary funds by a third over the next five years.”
Nicol says the firm has begun to “actively expand” its client-facing resources by hiring investment managers and financial planners.
For the first half of 2016, total funds at the wealth manager increased to £32.8bn, up 2.5 per cent from £32bn in the same period a year ago. Discretionary funds rose 4.4 per cent to £26bn.
Nicol says: “The first half saw further growth in our core business as well as continued progress towards achieving our long-term strategic goals.
“Despite challenging market conditions, we maintained recent growth rates in our discretionary business, while also moving firmly to execution stage on many of the growth initiatives we outlined in 2015.
“In the current market context, and given the short-term outflows resulting from business restructuring, the first half reflects a creditable performance.”
Discretionary fund inflows were £400m representing a growth rate of 3.2 per cent, but lower than the 4.2 per cent growth the year before.