Edinburgh Fund Managers' funds under management fell to £6.6bn from £7.3bn as profits plunged by 31 per cent.
Pre-tax profits have fallen to £11.7m from £16.9m as the fund manager was hit by the continuing turmoil in emerging markets
It was further hit by Bank of Scotland's decision to switch 40 per cent of its £1.1bn fund to index tracking specialist Legal & General. EFM still manages the remaining £700m of the fund.
EFM also lost £300m worth of funds in the break-up of its Dunedin Worldwide Investment Trust.
Despite the results, EFM remains upbeat about its future and is committed to remaining independent and is extending its links with life offices in a bid to boost distribution channels.