Brooks Macdonald is considering its options within the advice market to deploy £28mn of cash made from the sale of its international business.
It comes as the company seeks to improve net inflows by 5 per cent a year, a growth target which sits alongside a costs target of no more than five per cent.
Brooks Macdonald announced in its full year results today (September 12) that it has sold its international arm to wealth manger Canaccord Genuity Wealth in a deal worth up to £50.85mn, which includes the £28mn payable in cash on completion.
Incoming CEO, Andrea Montague, the former Chief Financial Officer who will take over from Andrew Shepherd on October 1, told FT Adviser: "We are considering options around distribution and around advice businesses"
Montague said having reduced the cost base by around £0.4mn in the six months to the end of June 2024, her focus was now on growth.
She added: "We do have a target around cost control of course, which is to have 5 per cent or less growth in the cost base, but top line growth is the priority.”
A chunk of that £0.4mn cost saving came from the outsourcing of the back office functions.
Today's results also showed a profit of £34mn, an increase of 12.5 per cent on the previous year, while assets under management stood at £18bn at the end of June.
Montague said the assets under management of the model portfolios service has grown five fold since 2020, while the aim is to continue to grow this, there is also a focus on the bespoke offering. The sales and investment management teams for these products have been merged, so that financial advisers can best decide whether to allocate clients to the model or bespoke offering.
The model portfolios attracted net inflows of £388mn, while the bespoke and funds products had net outflows of over £600mn.
Of the disposal of the international business, Montague said she is keen to focus on the UK. Brooks Macdonald had previously written down the value of the international business.
Brooks Macdonald’s acquisition strategy, said Montague, will focus on ensuring the deals done “fit within our financial parameters".
The company currently derives just £8.2mn of its total revenue of £128mn from financial planning income, with investment management fees contributing £92mn.
Brooks Macdonald’s FSCS levy for the six month period was £500,000.
david.thorpe@ft.com
