Brooks Macdonald Group H1 Earnings Call Highlights
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FUMA tops £20 billion as Brooks Macdonald reported total FUMA of £20.1bn and returned to positive net flows (£2m) for the first half since H2 2023, driven by strong Platform MPS inflows and market performance.
Revenue rises 12% to £58.2m with underlying profit before tax of £13.6m (underlying margin 23.4%); the board proposed an interim dividend up 3% and the group retains a strong balance sheet (cash £27m; capital resources £39.6m with c.£12m excess).
Strategic progress: the group completed recent acquisitions and launched Brooks Financial serving 9,500 clients (98% retention), invested in distribution, digital/AI and product development, and reiterated medium‑term targets of 5% annualized net flows and sub‑5% business‑as‑usual cost growth.
Brooks Macdonald Group (LON:BRK) reported half-year results for 2026 that management said showed “real momentum” against its strategy to reignite growth, highlighted by a return to positive net flows and funds under management and administration (FUMA) exceeding £20 billion for the first time.
Chief Executive Officer Andrea Montague said demand for the group’s services remained high as clients sought trusted advice, while recent acquisitions and improving flows supported revenue growth. Chief Financial Officer Catherine Jones added that the financial planning business was performing well and that the group had maintained “strict cost discipline” while continuing to invest to support growth initiatives.
Total FUMA rose 5% over the period to £20.1 billion. The group reported funds under management (FUM) of £17.8 billion, up 8% in the first half, including a 15% increase in Platform MPS assets and 4% growth across BPS assets. The group also highlighted advised assets of £5.3 billion, comprising £2.3 billion of “advised only” assets and £3.0 billion that are both advised and managed.
Investment and market performance contributed £1.3 billion during the half, which Jones attributed to the benefits of a centralized investment proposition delivering “strong, sustainable, risk-adjusted returns” over the long term.
Net flows were £2 million in the first half, compared with net outflows of £262 million in the prior-year period. Jones said it was the first half of positive net flows since the second half of 2023, reflecting a stronger focus on client engagement, distribution, brand and marketing over the last 12 months, alongside investment returns.
Platform MPS: net inflows of £0.4 billion, described as an annualized growth rate of 12%.
BPS: net outflows improved by around 50% to £0.2 billion, driven by higher gross inflows across the core BPS offering.
Total revenue increased 12% to £58.2 million. Jones said fee income benefited from higher average FUM levels, partially offset by lower transaction and FX income due to reduced trading volumes and lower interest income following cuts in prevailing interest rates.
Underlying costs increased 3%, resulting in underlying profit before tax of £13.6 million, equivalent to an underlying margin of 23.4%.
The board recommended an interim dividend of £0.31 per share, up 3% year-on-year. Jones said the increase was consistent with the group’s progressive dividend policy and reflected confidence in the strategy and outlook.
Bespoke Portfolio Service (BPS): BPS FUM increased to £8.9 billion, supported by market and investment performance. Jones said the reduction in net outflows was driven by a “step change” in client engagement, distribution momentum, and expansion into new regions. BPS revenue was £30.0 million in the first half. The BPS fee income yield decreased marginally, while the overall yield fell 5.9 basis points to 69.5 basis points, which management linked to lower transaction income.
Managed Portfolio Service (MPS): Total MPS FUM grew 13% to £7.8 billion, driven by strong net inflows into Platform MPS and market performance. Revenue increased 22% to £8.2 million, with higher average Platform MPS FUM—also including advised and managed assets added by acquisitions—more than offsetting a lower average yield due to product mix. Jones said Platform MPS now represented nearly 40% of group FUM and remained a key growth engine.
Financial planning: The integrated financial planning businesses, now operating under the Brooks Financial brand, generated £13.6 million of revenue in the half. The group reported that it now manages 56% of its advised assets, up from 51% six months earlier, which management said demonstrated the attractiveness of its propositions to financial planning clients. Jones said the average revenue yield on advised assets increased to 50.8 basis points, reflecting the higher yield from recent acquisitions, and reiterated that 50 basis points remained a reasonable “rule of thumb.”
Jones said revenues generated from the recent acquisitions totaled around £9.5 million in the first half, and that the acquisitions also contributed £1.0 million of MPS fee income from advised-and-managed assets.
Jones said underlying costs before net finance income rose 3% in the half, reflecting salary inflation and national insurance changes of £0.5 million, partly offset by cost savings delivered during the period totaling £1.3 million. Those savings included:
£0.6 million of integration synergies from staff exits, system migrations, and supplier rationalization
£0.5 million from organizational restructuring implemented in November
£0.2 million from renegotiating key contracts and consolidating third-party suppliers
The group also invested £2.0 million to support growth, including expanded front-office capabilities through leadership hires across distribution and investment management, and increased marketing activity including sponsorship partnerships and nationwide events. Jones said efficiency actions late in the half reshaped the cost base and were expected to generate annualized savings of £3 million, with benefits expected to come through more fully in the second half. She added that underlying costs before the FSCS levy were expected to be broadly in line with the first half.
At the end of December, Brooks Macdonald reported cash and liquid assets of £27 million. The group generated £13.3 million of operating cash from underlying performance over the six months and returned over £10 million to shareholders through dividends and share buybacks.
The company expensed £5.2 million in the first half for strategic initiatives, with around half tied to restructuring costs connected to the £3 million annualized savings, and the remainder linked to reviewing products and propositions and investing in digital capabilities, including AI. It also capitalized £9.3 million, with about half related to property fit-out costs and the remainder tied to operating model and systems improvements aimed at greater efficiency and automation.
Jones said a £6.5 million M&A charge reflected earn-out payments on recent acquisitions and integration costs, and that £8.3 million of “other items” mainly reflected timing differences between accruals and cash payments, offset by insurance recoveries from legacy litigation matters.
On capital, Jones said the balance sheet remained robust, with capital resources of £39.6 million at 31 December and an excess of £12 million over regulatory requirements and internal buffers before the interim dividend payment.
Montague said the group had completed the integration of three recent acquisitions and established Brooks Financial as a whole-of-market financial planning capability serving 9,500 clients. She said client retention was 98% and that the group had secured over £1 million in annualized cost synergies. Montague also said the business continued to evaluate further M&A opportunities and described Brooks as a “great home for IFA acquisitions,” citing an advisor-led approach and a “proven integration blueprint.”
Operationally, Montague highlighted the launch of a new Brooks Macdonald app for portfolio access, improvements to online product information, digitized onboarding across services, and the use of AI to simplify administration. She said advisor roadshows reached 330 advisors across 26 locations, with attendance up more than 30%, and that the group had strengthened leadership and embedded a new investment team in Scotland.
Montague also detailed a shift to combine investment management and distribution teams to target national and network firms and the “new model adviser” segment, with an objective of increasing the number of IFAs served by 20% over the next three years. She said the group was enhancing its BMIS outsourced investment service by introducing two levels of service.
In product development, Montague referenced a new lending partnership with Forens, continued development of high-net-worth offerings, and an expansion of the Retirement Strategies range, including two new strategies and distribution scaled to nine platforms.
Looking ahead, Jones said the company expected first-half revenue trends to continue into the second half, with costs before the FSCS levy broadly in line with the first half. She also said full-year 2026 performance was expected to be in line with market expectations, while the group remained confident in its medium-term targets of annualized net flows of 5% and business-as-usual cost growth below 5%.
Brooks Macdonald Group plc, through its subsidiaries, provides a range of investment and wealth management services to private clients, pension funds, professional intermediaries, and trustees in the United Kingdom, Isle of Man, and the Channel Islands. It operates through two segments, UK Investment Management and International. The company offers financial planning advisory services to high-net-worth individuals and families; and multi-asset and specialist fund products to the retail sector, as well as investment options.
