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Brewin Dolphin advisers’ favoured DFM

Brewin head of digital channels and investment services Gareth Johnson

Brewin Dolphin has been ranked the preferred DFM in a Money Marketing survey of advisers and paraplanners, well ahead of the next most favoured, Quilter Cheviot.

Thirty-three per cent of respondents listed the business as their preferred DFM, followed by 10.2 per cent responding in favour of Quilter Cheviot. LGT Vestra, Brooks Macdonald and Parmenion were the next most popular, but each was favoured by less than 5 per cent of advisers.

More than 400 respondents participated in the survey, which sought to examine the increasingly important role of DFMs in the adviser community.

Many respondents praised Brewin for its service and transparency with many noting their relationship with the FTSE 250 firm spans many years.

“Support could be more active across the spectrum to match that provided by Brewin Dolphin,” one respondent said of the DFM industry, while another praised Brewin on charges.

That respondent added: “I think there is a lack of transparency on DFM charges and they should be quoting both their fee and approximate underlying costs, which again is why I like Brewin Dolphin as we need to show the client the overall cost so they can compare [that] to other levels of service.” 

According to its 2017 annual results Brewin’s discretionary funds under management increased 17.4 per cent to £33.8bn, compared to £28.8bn in 2016. Adjusted profit before tax rose 14.8 per cent to £70m, compared to £61m in 2016.

The intermediaries channel drove around 90 per cent of net new fund growth.

Meanwhile, survey runner-up Quilter Cheviot, which was acquired by Old Mutual Wealth in 2015, held £23bn assets under management at 30 September 2017. For the three and a half-year period from January 2014 to June 2017, the discretionary fund manager has landed two-thirds of its business from advisers, while one third came direct.

Old Mutual’s interim results from September showed Quilter delivered adjusted operating profit before tax of £24m in H1 2017, on par with the comparable period in 2016. Old Mutual Wealth Private Client Advisers was one the largest suppliers of business in that period, contributing £100m to Quilter assets.

Brewin head of digital channels and investment services Gareth Johnson tells Money Marketing intermediaries have been a focus of the firm’s growth strategy since 2012.

Johnson says the businesses’s focus on the agent as client model has gone down well with advisers and it has also increased its sales team across the country, whereas some competitors have reduced headcount. There are 17 regionally-based specialist business development managers, according to the 2017 interim results.

Johnson adds Brewin has been developing its services in response to feedback from advisers, including cutting costs in its managed portfolio service on the back of new segregated mandates for core portfolios.

“One of the key constitutional points of creating those mandates was that there wouldn’t be a double charge for investors,” says Johnson, who says economies of scale will be passed on as the MPS grows in AUM.

Brewin’s bespoke discretionary service is offered to more than 1,400 firms with more than 100 new clients signing up in 2017, while the MPS represents 22 per cent of intermediaries business. Brewin last year launched the MPS Passive Plus version of the service, which is targeted at providing a more cost-effective solution for clients with less complex needs.

Quilter head of business development Scott Stevens says it differs from Brewin in that it runs a tripartite relationship with advisers, whereby it takes on suitability for the underlying client, as opposed to the agent as client model.

“I think these different types of discretionary fund manager relationships is the next big thing to be focused on by the regulator,” Stevens says.

The FCA says it is unable to comment on conversations with industry that is part of its general supervision work.

Brewin and Quilter were founded in 1762 and 1771 respectively.

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Comments

There are 3 comments at the moment, we would love to hear your opinion too.

  1. There must be a complete lack of due diligence on behalf of the advisers that use Brewin, their record of high charges and passing the regulatory resposiblity onto advisers is legendary
    Come on guys do more than take their word for it, scratch the surface a little and see what jumps out

  2. Must admit this seems to go against my experience of Brewin.

  3. I had an existing client that was recommended to brewin (by a solicitor). Around that time brewin dolphin had been, regularly, contacting me to pass them business, and I was told they were happy to work alongside a client’s existing IFA.
    My experience was less than satisfactory, however.
    I never really got to the bottom of it, so can’t lay all the blame at their door, but they wouldn’t be my choice for a DFM.

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