Brewin Dolphin profit falls as market sell-off eats into assets

Brewin Dolphin posted a 5.1 per cent fall in first-half earnings on Wednesday as the coronavirus-related market sell-off towards the end of the period saw assets under management (AUM) fall by £3.6 billion (€.4.1 billion)

The British wealth manager said statutory pretax profit dropped to £28.2 million for the six months ended March 31st, while AUM stood at £41.4 billion, a decrease from £45 billion at its fiscal year-end.

A double whammy of concerns over an impending recession, triggered by the spread of the new coronavirus and a crash in oil prices has seen many investors flee from risky assets for most of 2020 thus far.

But the ructions have also fuelled demand for integrated wealth management services, Brewin said, pointing to total discretionary net flows of £500 million in its first half, up 2.5 per cent on an annualised basis.

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“The recent market weakness has created a high level of uncertainty as to the outlook for the remainder of the financial year. It is too early to ascertain the consequential impact this may have on our full year 2020 income and profitability,” Brewin Dolphin said.

Brewin estimated cost savings of £6 million to £8 million for the rest of the year, driven by “disciplined cost management”.

Brewin Dolphin entered the Irish market in 2011 through the acquisition of Tilman Asset Management. Last November as it acquired the local wealth management arm of Investec, which he led, in a deal worth €44 million.

Brewin Dolphin's British peers St James's Place, Ashmore, Jupiter Fund Management and Rathbone Brothers have so far posted steep decreases in their AUMs during the period, while US-listed rival BlackRock's AUM plunged by nearly a trillion dollars. – Reuters