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Brown Shipley triples profits as it embarks on hiring spree

by Eleanor Lawrie on Jul 17, 2014 at 10:15

Brown Shipley triples profits as it embarks on hiring spree

Brown Shipley saw pre-tax profit triple to £7 million over the course of 2013.

The private bank’s assets under management increased by 12% to £3.1 billion, with 86% of this figure run on a discretionary basis. The group noted a 6% rise in investment management income, contributing to a 7% rise in net operating income to £41.1 million, overcoming a move out of trail-paying units.

In spite of this, Brown Shipley said it is becoming ‘increasingly difficult’ to grow funds under management (FUM).

‘Outflows of FUM from clients are becoming larger as capital withdrawals become more commonplace to compensate for lack of income on investments,’ the company said in its results.

But chief executive Ian Sackfield (pictured) told Wealth Manager Brown Shipley is not the only one in the industry to suffer from these kinds of redemptions.

‘It’s a concern everywhere. Interest rates are at 0.5%. The income is not there so people need more capital,’ he added.

During 2013, Brown Shipley’s Financial Services Compensation Scheme (FSCS) levy more than halved to £151,000; £220,000 less than 2012’s bill.

The results noted ‘the company was involved in a number of acquisition opportunities, although none were pursued to conclusion’ during last year.

Wealth Manager understands these included talks to buy Deutsche’s regional business Tilney, which was clinched by Permira, and Jupiter’s private client business in 2014.

Sackfield said the business is targeting discretionary and financial planning firms, but is not in talks with anyone at the moment. Instead, they will look to augment growth through quality private banking hires.

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