Wealth Manager - the site for professional investment managers

Register to get unlimited access to all of Citywire’s Fund Manager database. Registration is free and only takes a minute.

Brown Shipley triples profits as it embarks on hiring spree

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.

‘The focus is to grow and recruit the right private bankers from the right organisations, but culturally they also have to be right.’

Sackfield also acknowledged that senior hires will initially be loss-making.

‘If you recruit private bankers in the first 12-18 months you will lose money on these individuals, but it’s about long-term investment in the business.’

On the remuneration front, the bank paid out £734,000 to its highest paid director over the year, up £88,000 compared to 2012. This contributed to a total wage bill among senior management of £2.6 million, up £500,000 on the year.

Brown Shipley also grew its loan book by £26 million during the year to £118 million, which helped contribute to a 19% increase in interest income.

Leave a comment!

Please sign in or register to comment. It is free to register and only takes a minute or two.
Citywire TV
Brewin's Gutteridge & Foster talk property with Standard Life's Baggaley

Brewin's Gutteridge & Foster talk property with Standard Life's Baggaley

Gutteridge and Foster discuss UK commercial property with Jason Baggaley, manager of the Standard Life Property Income investment trust

Brewin's Gutteridge asks Odey's Tim Bond two tough questions

Brewin's Gutteridge asks Odey's Tim Bond two tough questions

Gutteridge puts the heat on Odey's asset allocation maestro with a couple of tough questions.

Brewin's Foster & Gutteridge: searching for the yield of dreams

Brewin's Foster & Gutteridge: searching for the yield of dreams

Guy Foster and Ben Gutteridge discuss the latest upbeat US payroll report and how it has increased the probability of a first hike in interest rates in June.

Your Business: Cover Star Club

Profile: Creechurch Capital’s CEO on going the extra mile in a crowded market

Profile: Creechurch Capital’s CEO on going the extra mile in a crowded market

Growing a business is the main aim of many company owners but managing that growth in a controlled way is just as important

Wealth Manager on Twitter