Brooks Macdonald Group (LON:BRK) used its 2026 half-year results Q&A session to highlight a return to net flows, growth in revenue, and progress on technology and operational investments that management says are improving service levels and creating capacity for further growth.
Chief Executive Officer Andrea Montague told participants the group had “returned to net flows” and exceeded £20 billion of funds under management and administration (FUMA) for the first time. She also cited 12% revenue growth, double-digit growth in its managed portfolio service (MPS), “50% growth in BPS,” and strong investment performance. Montague added that Brooks Financial is now “an integrated and scalable business,” following deliberate investments to improve customer service, expand propositions, and increase efficiency.
Operational upgrades and use of AI
On the client side, Montague pointed to a shift to digital onboarding. She said that about 18 months ago, clients were asked to complete a 42-page document before onboarding, but that process has now been digitized.
Montague also outlined specific applications of AI and automation across the business, including:
- An IT support bot that she said has “reduced materially” the volume of questions going into the IT team, freeing up capacity.
- Automation of fund fact sheet updates, which she said previously required significant manual effort across 450 fact sheets but can now be done “at the touch of a button.”
Montague tied these initiatives to business outcomes, saying retention has improved “materially.” She also said the group has built a scalable platform in both investment management and financial planning and has “done the heavy lifting” over the past 18 months, with further efficiencies expected to “drop through to the bottom line.”
She added that the deployment of tools is affecting day-to-day work. Referencing a new investment team in Scotland, Montague said feedback indicated the use of AI tools had already reduced paperwork by about 60% as the team becomes accustomed to the technology.
Cash use, investment levels, and capital review
RBC Capital’s Ben Bathurst asked about the drivers behind the first-half cash movement and expectations for strategic transformation and restructuring, capital expenditure, and M&A-related cash use in the second half.
Montague characterized the group as “cash generative” and said the last 18 months of acquisitions and “material investments” underpin the results presented. She also described the current period as “a year of transformation,” which management expected would involve cash usage, and pointed to future contributions from “the return of proceeds from BMI” and ongoing generation from the core business.
Chief Financial Officer Katherine Jones provided more detail. She reiterated that management was comfortable with the cash and capital positions and said the company had flagged elevated investment levels as part of efforts to transform the business and “reignite growth.” She said those investments were contributing to improvements in flows, products and services, M&A activity, and efficiency actions that are expected to drive ongoing savings.
Jones said investment would continue in the second half but at a lower level than in the first half. She identified the fit-out cost of an office move as a major first-half item, noting the move was required because the company had to vacate its previous building. Jones said the fit-out is now complete and the company is in the building, so those costs will not continue.
Jones also noted that the company returned nearly £11 million to shareholders in the first half through the dividend and completion of a share buyback.
On forward-looking cash items, Jones said she would expect capital expenditure and restructuring-related cash outflows to continue in the second half “at a much lower rate,” and suggested a level “around half” of the first-half amount. For M&A, she pointed to deferred consideration, saying the accounts estimate £10 million to be paid in the second half.
Asked when the company would return to being cash generative, Jones said the business is already cash generative and emphasized that the company’s cash position allowed it to invest in transformation while seeing benefits flow through.
On capital requirements, Jones said the company reviews its internal capital adequacy assessment (ICAAR) annually, typically in December, and that the movement observed was similar to a change seen in the first half of the prior year when the review was completed.
Distribution strategy and IFA growth target
In webcast questions, Zeus Capital’s Robert Savage asked about a target to increase the number of independent financial advisers (IFAs) served by 20% over the next three years and how the IFA base has grown.
Montague said she sees a “material opportunity” to serve more IFAs across the UK and stated there are about 5,000 IFA firms in total. She said Brooks Macdonald currently serves “just over 20%” of them.
Montague said the company has built out its distribution capability and aligned it more closely with the investment management team to improve support for IFA and direct clients. She also outlined focus areas for expansion:
- National firms and networks, where she said 40% of assets sit with 5% of firms.
- “Model advisors,” where she said there are 1,000 firms and Brooks Macdonald serves 250.
- Brooks Macdonald Investment Services (BMIS), which she described as an investment services proposition positioned to help IFAs outsource investment management complexity amid increased regulation.
Montague said the 20% growth target over three years is “credible,” while emphasizing that the strategy is not only about increasing the number of IFAs, but also about relationship quality and delivering the full proposition across both accumulation and decumulation.
Financial planning: organic and inorganic opportunities
Investec’s Mike Trippitt asked for insight into how management evaluates organic versus inorganic opportunities in financial planning, particularly given yield expansion experienced in the first half.
Montague said the company has completed “really successful acquisitions” in financial planning and that she and Jones continue to evaluate opportunities for the “right quality and the right fit.” She added that the group is increasingly “recognized as a home for IFAs” and differentiated that positioning from “mass consolidators.”
Montague pointed to 98% retention in past activity, along with “material synergies” in cost and revenue, and said the business is now operating on one platform with aligned processes, people, and remuneration.
Jones laid out the criteria used to assess potential deals, saying acquisitions must be strategically compelling, financially attractive, high quality, and a cultural fit. From a financial perspective, she said the company focuses on earnings impact and how quickly a transaction could be accretive, along with return on investment relative to the cost of capital. Jones also said management compares inorganic opportunities with the potential return from investing organically and weighs execution risk and the likelihood of successful integration.
Montague closed the session by saying the company had “achieved a lot” in the first six months and had already begun the second half of the year with continued progress.
About Brooks Macdonald Group (LON:BRK)
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.
