3rd Quarter FUM Announcement

Brooks Macdonald Group PLC

17 April 2024

 

17 April 2024

BROOKS MACDONALD GROUP PLC

Third Quarter FUM Announcement

"FUM up 2.0% in the quarter to £17.9 billion"

Brooks Macdonald Group plc ("Brooks Macdonald" or "the Group") today publishes an update on its Funds under Management ("FUM") for the third quarter of its financial year, the three months ended 31 March 2024.

Andrew Shepherd, CEO of Brooks Macdonald commented:

"Today we report that FUM increased to £17.9 billion over the course of the quarter as markets responded to the improving macroeconomic outlook. We have also seen encouraging flows in our Platform MPS and specialist BPS propositions demonstrating continued demand for our broad product range.

"However, interest rates are still high, placing continuing pressure on our clients, and we remain focused on meeting their needs through our innovative solutions and excellent client service.

"I remain confident in our future opportunity, and I want to extend my appreciation to all our stakeholders for their ongoing support, and to everyone at BM in particular for their unwavering commitment to our clients."

Quarterly FUM update

During the quarter ended 31 March 2024, the Group's closing FUM increased by 2.0% to £17.9 billion (31 December 2023: £17.6 billion).

Gross inflows were robust at £0.5 billion, whilst gross outflows continued to be elevated given the prevailing macroeconomic backdrop of high interest rates and inflation, reaching £0.8 billion in Q3.  This resulted in overall net outflows for the quarter of £0.3 billion or 1.7%. Positive investment performance in the quarter of £0.6 billion or 3.7%, more than offset net outflows and contributed to the increased FUM.

Highlights for the quarter included:

·    Platform MPS, including the Group's B2B offering for financial advisers, BM Investment Solutions ("BMIS"), grew to £4.2 billion with net new business of 1.7% of opening FUM.

·    BPS experienced net outflows in the quarter of £0.2 billion or 2.3%, as clients continue to withdraw funds to repay debt or hold higher cash balances in the current interest rate environment;

·    Within UK BPS, our Decumulation specialised product grew by 9.0% in the quarter, offering a solution to meet clients' income requirements by shielding their portfolio from downturn in the early years of withdrawal;

·    Investment performance for the quarter was positive at 3.7%, slightly below the benchmark¹ which increased by 4.4% in the period, the difference driven by the predominance of clients of a lower risk profile in our book than the benchmark and therefore a higher allocation to bonds which underperformed equities in the quarter;

Outlook

The outlook for underlying profit for the year remains in line with market expectations. In the second half, we will continue to realise the cost benefits of the organisational changes announced in October 2023 while retaining a focus on operational excellence.

Demand for our products and services remains positive, particularly in our specialised BPS products and Platform MPS, which is reflected in our gross inflows. However, given the persistence of current trends in the market and client behaviour, in line with previous guidance, the Group expects net outflows for the full year. 

The strategic review of the Group's International operations is progressing and we will communicate the outcome later this year.

¹ MSCI PIMFA Private Investor Balanced Index

Analysis of FUM net flows by service over the quarter

Quarter to 31 March 2024 (£m)
	Opening FUM 1 Jan 24	Organic net new business	Investment performance in the period	Closing FUM 31 Mar 24	Organic net new business	Total mvmt
BPS	8,812	(205)	306	8,913	(2.3)%	1.1%
MPS Custody	970	(20)	39	989	(2.1)%	2.0%
MPS Platform	3,930	65	169	4,164	1.7%	6.0%
MPS total	4,900	45	208	5,153	0.9%	5.2%
UKIM discretionary	13,712	(160)	514	14,066	(1.2)%	2.6%
Funds	1,652	(112)	47	1,587	(6.8)%	(4.0)%
UKIM total	15,364	(272)	561	15,653	(1.8%)	1.9%
International	2,215	(22)	81	2,274	(1.0)%	2.7%
Total	17,579	(294)	642	17,927	(1.7)%	2.0%
Total investment performance					3.7%
MSCI PIMFA Private Investor Balanced Index1					4.4%

¹Capital-only index.

Analysis of FUM net flows by service over the nine months

Nine months to 31 March 2024 (£m)
	Opening FUM		Organic net new business			Total Inv. Perf.	Closing FUM	Organic net new business		Total mvmt
	1 Jul 23	Q1	Q2	Q3	Total YTD	YTD	31 Mar 24	YTD		YTD
BPS	8,527	(98)	(94)	(205)	(397)	783	8,913	(4.7)%		4.5%
MPS Custody	966	(14)	(21)	(20)	(55)	78	989	(5.7)%		2.4%
MPS Platform	3,489	147	121	65	333	342	4,164	9.5%		19.3%
MPS total	4,455	133	100	45	278	420	5,153	6.2%		15.7%
UKIM discretionary	12,982	35	6	(160)	(119)	1,203	14,066	(0.9)%		8.4%
Funds	1,708	(78)	(71)	(112)	(261)	140	1,587	(15.3)%		(7.1)%
UKIM total	14,690	(43)	(65)	(272)	(380)	1,343	15,653	(2.6)%		6.6%
International	2,157	(27)	(33)	(22)	(82)	199	2,274	(3.8)%		5.4%
Total	16,847	(70)	(98)	(294)	(462)	1,542	17,927	(2.7)%		6.4%
Total investment performance									9.2%
MSCI PIMFA Private Investor Balanced Index1									10.3%

¹Capital-only index.

Analysis of FUM gross flows by service over the nine months

Nine months to 31 March 2024 (£m)
	Organic gross inflows					Q3 vs Q2	Organic gross outflows				Q3 vs Q2
	Q1	Q2	Q3	Total YTD	Inc/(dec) %		Q1	Q2	Q3	Total YTD	Inc/(dec) %
BPS	192	173	139	504	(19.7)		(290)	(267)	(344)	(901)	28.8
MPS Custody	15	15	19	49	26.7		(29)	(36)	(39)	(104)	8.3
MPS Platform	276	317	282	875	(11.0)		(129)	(196)	(216)	(541)	10.2
MPS total	291	332	300	924	(9.6)		(158)	(232)	(255)	(645)	9.9
UKIM discretionary	483	505	439	1,427	(13.1)		(448)	(499)	(599)	(1,546)	20.0
Funds	55	52	56	163	7.7		(133)	(123)	(169)	(424)	37.4
UKIM total	538	557	495	1,590	(11.1)		(581)	(622)	(768)	(1,970)	23.5
International	44	34	38	116	11.8		(71)	(67)	(60)	(198)	(10.4)
Total	582	591	533	1,706	(9.8)		(652)	(689)	(828)	(2,168)	20.2

Enquiries to:

Brooks Macdonald Group plc Andrew Shepherd, CEO Andrea Montague, Chief Financial Officer		www.brooksmacdonald.com 020 7927 4816
Singer Capital Markets (Nominated Adviser and Joint Broker) Charles Leigh-Pemberton / James Moat		020 7496 3000
Investec Bank plc (Joint Broker) Bruce Garrow / David Anderson		020 7597 4000
FTI Consulting Edward Berry	[e-mail] 07703 330199

Notes to editors

Brooks Macdonald Group plc, through its various subsidiaries, provides leading wealth management services in the UK and internationally. The Group, which was founded in 1991 and began trading on AIM in 2005, had discretionary Funds under Management of £17.9 billion as at 31 March 2024.

Brooks Macdonald offers outsourced discretionary investment management for intermediaries and advice-led integrated wealth management for private clients. The Group also acts as fund manager to a range of onshore and international funds.

The Group has fourteen offices across the UK and Crown Dependencies including London, Birmingham, East Anglia, Exeter, Leeds, Manchester, Nuneaton, Southampton, Tunbridge Wells, Scotland, Wales, Jersey, Guernsey and Isle of Man.

LEI: 213800WRDF8LB8MIEX37

www.brooksmacdonald.com / @BrooksMacdonald

 

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