UK-based investment managers have been flocking to Brewin Dolphin in the last year as it offers a safe haven for people who don’t like to work in a banking environment, according to David McCorkell, head of private client investment management at Brewin. Brewin, which currently has £21 billion in funds under management, has not gone down the relationship manager route; investment managers run their own clients’ investments without having to stick to rigid guidelines and there are no in-house funds to sell. The firm does have £4 billion of client assets in collectives though. “If we buy a business that has a closed fund management business attached we would most likely sell the funds business,” Mr McCorkell told WealthBriefing. Investment managers work in teams, of which there are 120. These have one or two directors and a number of assistants. The teams are based in the 39 offices around the country (although clients are not necessarily based in the regions from which they are served.) Forty-two investment managers joined Brewin Dolphin last year plus assistants making a total at the year end of 1,670 staff in total. The 15 most recent hires, announced at the beginning of this year, came to Brewin mainly from Gerrard and Brown Shipley. Part of the attraction, says Mr McCorkell, is that joiners have an equity earn-in based upon client assets that they bring over which costs the company around 1 per cent. “Joining is also a good opportunity for investment managers to clean up their client base,” said Mr McCorkell whose role has been enhanced following the announcement that John Hall retires at the AGM at the end of February. Generally, Brewin finds that new teams bring well above 50 per cent of their clients over with them, so the focus is always to try to recruit the whole team from a competitor. “Clients, on the whole don’t like a change of approach being forced upon them by their investment manager and that’s one of the reasons we’ve been so successful in employing individual managers and teams and why so many of their clients have chosen to come with them. The trust of the client is in the investment manager not only in the company,” he said. “We’re also finding, with the introduction of MiFID, that we’re getting a larger slice of clients’ assets, as the process of refreshing KYC forms is giving us a whole new swathe of information about what investments our clients have with other managers.” And compensation is heavily weighted towards profit sharing for investment managers and can be as much as 45 per cent at the top level. Although Brewin’s investment managers have freedom with their clients’ portfolios, many stick within the guidelines and recommendations that come from a number of central investment research teams, including both primary and secondary equity market analysis and teams covering collective funds; fixed interest and investment trusts, according to Mr McCorkell. UK-listed Brewin currently manages £10.7 billion in discretionary assets, up from £6.9 billion last year although much of this growth has come from transfer from advisory business and new teams joining. It will not turn away advisory portfolios as it makes 0.66 per cent on these assets, compared with the 1.13 per cent it makes on discretionary accounts. The company has to date had good experiences with its regional expansion. It’s essentially a UK-regional business with major offices in Manchester, Leeds, Newcastle, Birmingham, Edinburgh and Glasgow. This has been especially so since the purchase of Bell Lawrie and Wise Speke in 1993 and 1998 respectively. The new Oxford office was profitable within a year, and other new offices opened in 2007 in Plymouth, Swansea, Hereford and York have all got off to a very good start, so it’s no surprise that the business wants to expand geographically in the UK and can’t rule out further afield. “One example of this is that we’re very keen on Dublin as a location,” said Mr McCorkell. Eighty per cent of Brewin’s business is private client investment management, which includes charities, although the company is also investment banker to more than 130 UK companies. “Our average client size is in the region of £200-300,000 so it’s fair to say the we serve a very broad cross section of investors across the whole country. Our sweet spot is just over £1 million and this is a very good market, to which we are able to offer a bespoke service.” “These clients tend to be quite conservative with their investments, they don’t want a racy approach and we continue to be a long-only manager. That said we’re always looking at the offering for clients – for instance structured products are now analysed by our in-house collective research team and we do have a sprinkling of funds of hedge funds in some clients' portfolios.” .