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Brooks Macdonald in-house advice a ‘major introducer’ of funds into DFM

Discretionary fund manager Brooks Macdonald has said that its in-house financial planning business remains a “major introducer” of funds into its investment solutions.

Brooks offers independent, whole of market financial advice, along with managed portfolio services, multi-asset model portfolios, and bespoke investment options.

In Brooks’ annual results released this morning, it says it is committed to “robustly managing any perceived channel conflict”, but notes that the financial planning division “remains a major introducer of new investment management funds to the investment management segment of the group”.

The FCA asset management market study noted the potential for conflicts of interest to arise when advisers are recommending funds at related companies.

Brooks’ financial planning business made a £5,000 loss during the year, compared to a slight profit of £300,000 in the 2017 financial year.

The firm says it expects demand for financial planning to grow as a temporary downturn in defined benefit transfer activity fades away.

The results statement reads: “In line with the industry we have seen a reduction in demand for defined benefit transfers in recent months as the sector adjusts to the servicing and suitability assessment demands of the product.  However, although not reaching the highs of recent years, we expect this to improve over time, given the ongoing and growing need for individuals to seek financial planning advice before and through retirement.”

It also expects its discretionary propositions to become more popular as more planners look to outsource the investment process, and will conduct a “review of how we best serve our major strategic adviser partners.”

The results say: “The level of penetration of the adviser community by discretionary fund managers remains low and we are confident that regulatory and commercial trends mean that the flow of firms looking to outsource investment management will remain strong.”

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