Brewin hit by £6.1m compensation levy

PROFIT GROWTH at financial services group Brewin Dolphin has been wiped out by a £6.1m charge paid to the Financial Services Compensation Scheme (FSCS) for the collapse of failed firm Keydata.

The wealth manager saw its pretax profit decline by 21 per cent on last year to £12m in the six months to 27 March.

Excluding the charge and other one-off costs, the firm posted an almost 10 per cent pre-tax profit increase to £22.9m.

Financial services firms were forced to contribute to a £247m levy following the collapse of Keydata.

The company said it was taking an “active role” with regulators to prevent such large levies being imposed on the industry in future.

“It’s done and dusted, let’s look forward just as much as anyone else, see what can be done so that sort of thing can be seen earlier before it becomes quite as destructive,” executive chairman Jamie Matheson told City A.M..

“I think there are changes underway and I think it’s important that the industry engages in the debate surrounding those changes and we’re certainly willing to do that,” he added.

Brewin Dolphin also revealed its funds under management had hit £25bn for the first time. Total managed funds increased seven per cent in the six months to 27 March.

The company said its corporate advisory and brokerage business, which had agreed a management buyout to merge with Spanish adviser N+1, would no longer be a part of the group by the end of the year.

Brewin shares closed 0.2 per cent lower at 165.7p yesterday.