A UK base rate of 0.5% is compelling wealthy individuals to move their savings out of cash and other low-yielding assets and into equities. For this reason investors will be particularly interested to see how the UK’s largest independent private client wealth manager (PCWM) Brewin Dolphin (BRW) is performing when it reports interims tomorrow (29 May).
Those looking for clues as to how the numbers might have shaped up could well alight on Charles Stanley's (CAY) year-end trading update (11 Apr) for sustenance. They could also alight on last month’s first-quarter figures from St James’s Place (STJ), another financial services business serving the high net worth individuals who have the most to lose from record low interest rates.
Brewin’s spring half-year trading update (21 Mar) was perfunctory at best. The sudden departure of executive chairman Jamie Matheson and news of who would replace him understandably dominated matters at the time. But rival PCWM Charles Stanley revealed a 15.3% surge in funds under management (FUM) for its year ending 31 March and a particularly strong performance from its discretionary FUM, which advanced 27.4% to £6.4 billion.
Meanwhile the £4.2 billion first-quarter increase in FUM recorded by St James’s (25 Apr) included £947 million of net inflows, a new business surge echoing Stanley’s strong discretionary flows. St James’s net inflows during the opening three months of 2013 were 36% ahead of last year. In addition the company increased adviser numbers and took advantage as smaller competitors suffered with the increased regulatory burden created by the Financial Conduct Authority’s Retail Distribution Review (RDR). Brewin, being one of the leaders in the sector, has in the past said it would benefit from RDR too.