Wealth manager Brooks Macdonald has reported a 45 per cent jump in discretionary funds under management, but warns 2014’s margins could see “an adverse impact” from the cost of investing in the business.
In a trading update for the year to 30 June, the firm reveals discretionary funds have reached £5.11bn – up from £3.52bn reported for the previous 12 months.
Brooks Macdonald’s discretionary funds grew by £1.59bn over the 12-month period. When the group’s acquisition of Spearpoint, which it bought in November 2012, is stripped out, assets were up by £904m, or 25.6 per cent.
Advisory funds under management, which were previously managed by Spearpoint, stood at £348m – a decline from £357m at the end of December.
The firm says it plans to continue with the organic growth of the business and the launch of new funds. But it also notes it has recently upgraded its existing IT systems and positioned its Managed Portfolio Service fees at the same level across new and existing funds, while regulatory costs have risen.
Although it expects these investments to benefit over the medium to long term, the wealth manager warns their combined cost will create “an adverse impact” on margins during the year ending June 2014.
Brooks Macdonald chief executive Chris Macdonald says: “The last year has been very active, with the successful acquisition and integration of Spearpoint, strong organic growth, the launch of new funds and significant investment across the business.
“We anticipate making further progress in maintaining this organic growth of funds under management in the new financial year and the board remains confident for the future prospects of the group.”