Brewin Dolphin trade volumes fall on fee shift

Michael Bow
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WEALTH manager Brewin Dolphin posted its third consecutive double-digit drop in trading volumes yesterday as it continues to switch to a transparent fee-based model.

The firm saw overall income increase 4.4 per cent over the year from £63.9m to £66.8m but non-recurring income fell 17.9 per cent – in keeping with an 11 per cent drop in trading volumes last quarter and a 26 per cent fall in the first quarter.

The overall uptick in income was led by a 20 per cent surge in recurring income, which now represents more than two-thirds of the firm’s total income.

The Smithfield Street head-quartered company, which this year celebrates its 250 year anniversary, switched its pricing model earlier in the year in line with broader model changes in the wealth management industry due to the Retail Distribution Review.

However, the firm boosted its assets under management since September, increasing them from £24bn to £25bn, as £1.2bn of outflows were offset by £1.1bn of inflows and a similar increase due to market price movements.

Numis analyst David McCann said: “Revenue was disappointing, predominantly due to weak commission volumes.

“This is particularly disappointing given management's guidance most of the way through the quarter at the analyst meeting on 29th May, which was for Q3 volumes to be ‘more of the same seen in Q2’ and ‘possibly fractionally increased.’”

Edison Research’s Mark Thomas added: “Re-structuring of pricing has seen good growth in recurring income while non-recurring trading commissions are under pressure.”

The firm, led by executive chairman Jamie Matheson, also saw advisory funds under management drop 7.1 per cent from September 2011.