Brooks Macdonald Returns to Positive Net Flows in H1 2026 as Revenue Climbs 12%

Brooks Macdonald’s H1 2026: Back to Positive Net Flows and Double‑Digit Revenue Growth

Brooks Macdonald has put a small but symbolically important marker down: positive net flows of £2 million in H1 2026, the first positive half since H2 2023. Revenue grew 12% to £58.2 million, helped by a step-up in financial planning income and higher average assets. Profit margins are lower as the Group invests in growth and integration, but the direction of travel on flows and client activity is improving.

Here is what stands out, why it matters, and what to watch next.

Key numbers at a glance

Total FUMA (funds under management and advice)	£20.1 billion (+5% vs 30 June 2025)
Total FUM (managed)	£17.8 billion
Net flows	£2 million (H1 2025: outflows £262 million)
Revenue	£58.2 million (+12%)
Underlying PBT and margin	£13.6 million; 23.4% (H1 2025: 29.9%)
Statutory PBT	£6.2 million (down 51%)
Interim dividend	31.0p per share (+3%)
Cash resources and liquid assets	£27.0 million (30 June 2025: £53.8 million)
Excess capital after internal buffer	£12.0 million (before interim dividend)

Flows: green shoots in BPS and strong MPS platform inflows

FUMA rose 5% to £20.1 billion, mostly thanks to market and investment performance of £1.3 billion. The real strategic win is the turn to positive net flows. It is small at £2 million, but it caps four consecutive halves of sequential improvement and signals stabilisation.

• Bespoke Portfolio Service (BPS) FUM grew 4% to £8.9 billion driven by markets, while net outflows improved to £211 million, a 48% reduction versus H1 2025 outflows of £408 million. High net worth client numbers rose 8%, which should help future mix and revenue quality.
• Managed Portfolio Service (MPS) FUM rose 13% to £7.8 billion. Platform MPS saw strong net inflows of £362 million (H1 2025: £288 million), partly offset by MPS Custody outflows of £73 million.
• Advised-only assets were £2.3 billion (30 June 2025: £2.6 billion). Management’s aim is to migrate more of this into managed and advised mandates over time, subject to suitability.

In my view, the combination of BPS outflow improvement and sustained Platform MPS momentum is exactly what investors wanted to see. The mix skews to Platform MPS, which carries a lower yield, but it is scalable and sticky if service and performance hold up.

Revenue mix is shifting: more planning income, lower yields

Revenue rose 12% to £58.2 million, driven by:

• Financial planning income of £13.6 million (H1 2025: £5.1 million), reflecting recent acquisitions and integration into Brooks Financial.
• Fee income of £37.8 million (H1 2025: £37.1 million) on higher average FUMA.

This was held back by lower transactional and FX income of £3.9 million (H1 2025: £5.9 million) on softer trading, and lower interest income of £2.9 million (H1 2025: £3.8 million) as Bank of England rates eased.

FUM-related yield fell to 50.6bps (basis points) from 59.2bps, mainly due to:

• Lower BPS transactional activity, dragging total BPS yield to 69.5bps (H1 2025: 75.4bps).
• Mix shift to lower-yield Platform MPS, with average Platform MPS FUM up 41.6% year on year.
• Lower net interest yield at 6.2bps (H1 2025: 8.0bps).

There is a conscious pivot here: embedding financial planning and scaling Platform MPS. It presses yields but broadens the addressable market and deepens client relationships. If net inflows keep improving, volume can offset yield pressure.

Costs and profits: investment drag now, savings building

Brooks is investing in digital capability, AI and product innovation, and absorbing acquisition and integration costs.

• Underlying costs excluding acquisitions rose 3% to £45.4 million, reflecting inflation, higher NI and targeted growth hires, partly offset by £1.3 million of efficiency actions.
• Overall underlying costs including acquisitions rose 20% versus £37.8 million in H1 2025.
• Underlying PBT fell 12% to £13.6 million and the margin slipped to 23.4%.
• Statutory PBT dropped to £6.2 million due to non-recurring items, notably £6.8 million of strategic transformation and restructuring, £2.4 million amortisation of acquired client relationships, and £1.2 million of acquisition and integration costs. There was a helpful £3.0 million credit in other non-operating items, largely insurance proceeds.

On the positive side, organisational restructuring is expected to deliver annualised savings equivalent to £3 million, and Brooks Financial integration has already realised over £1 million of annualised cost synergies with 98% client retention. If they maintain cost discipline, those benefits should come through more visibly in H2 and FY 2027.

Balance sheet, cash and dividend: investment-funded squeeze, but capital headroom remains

Cash resources and liquid assets fell to £27.0 million (30 June 2025: £53.8 million), reflecting the final FY 2025 dividend (£7.9 million), the tail end of the £10.0 million buyback (£3.0 million in H1), strategic transformation and restructuring (£5.2 million), capital expenditure (£9.3 million, mainly the head office move), and acquisition earn-outs and integration (£6.5 million).

Excess capital after the internal buffer was £12.0 million at 31 December 2025 (before the interim dividend), down from £15.6 million. The Board still lifted the interim dividend 3% to 31.0p per share, payable on 10 April 2026 to shareholders on the register at 13 March 2026.

My take: the cash and capital moves are deliberate and tied to the growth plan. H2 investment is expected to be lower than H1 following the office move. Watch the cash rebuild and any further M&A earn-outs.

Execution highlights: digital, AI and adviser reach

• Brooks Financial established and integrated, creating a scalable, whole-of-market financial planning business.
• New mobile app launched and client onboarding digitised to improve experience and efficiency.
• AI deployed to reduce admin burden, freeing time for client service.
• Nationwide adviser engagement and continued product innovation to support distribution.
• Defaqto Gold for Discretionary Fund Management for the fifth consecutive year.

The investment engine room is clearly humming. The near-term trade-off is lower margin; the prize is better growth capacity and operating leverage over time.

Outlook: guidance intact, focus on flows and costs

Management expects H1 revenue trends to continue into H2, with H2 costs (before any FSCS levy) broadly in line with H1. Full-year 2026 performance is guided to be in line with market expectations. Medium-term targets are reiterated: annualised net flows of +5% and business-as-usual cost growth of under 5%.

What to watch next

• Q3 2026 FUMA update on 15 April 2026.
• Net flows trend, particularly BPS stabilisation and continued Platform MPS inflows.
• Yield pressure vs volume growth, especially if markets cool.
• Delivery of £3 million annualised restructuring savings and further integration synergies.
• Cash trajectory post head office move and earn-out payments.

My verdict: momentum building, but margin recovery needs proof

• Positives: first positive net flows since H2 2023; double-digit revenue growth; MPS Platform inflows remain strong; planning income scaling; cost savings identified; dividend up 3%.
• Negatives: yield compression to 50.6bps; statutory profit hit by one-offs; cash and liquid assets down to £27.0 million; underlying margin down to 23.4%.

Overall, this is a credible step forward. The shift to advice-led, platform-friendly distribution is working, investment performance is supporting asset growth, and the flow trend has turned. The next test is converting today’s investment and integration work into sustained net inflows and improving margins through H2 and into FY 2027. If they can keep Platform MPS growing, keep chipping away at BPS outflows, and hold the cost line, the equity story gets more compelling.