Gross inflows of £0.5bn were outweighed by gross outflows of £0.8bn in the third quarter, leaving overall net outflows of £0.3bn (1.7% of total funds under management).

The firm has seen high gross outflows for the past three quarters, with net outflows for the half ended 31 December reported as £0.2bn.

Brooks attributed the outflows to client cost of living challenges due to high interest rates and inflation and added that it expects to see net outflows for the full year.

Positive investment performance of £0.6bn (3.7%) in the quarter more than offset net outflows with group funds under management ending the quarter at £17.9bn (31 December 2023: £17.6bn).

However, investment performance of 3.7% was slightly below the benchmark (MSCI PIMFA Private Investor Balanced Index) which increased by 4.4% over the same period. Brooks blamed the difference in performance on its large number of clients with a lower risk profile and higher allocation to bonds.

Andrew Shepherd, CEO of Brooks Macdonald, said: "Today we report that FUM increased to £17.9 billion over the course of the quarter as markets responded to the improving macroeconomic outlook. We have also seen encouraging flows in our Platform MPS and specialist BPS propositions demonstrating continued demand for our broad product range.

"However, interest rates are still high, placing continuing pressure on our clients, and we remain focused on meeting their needs through our innovative solutions and excellent client service.”

Platform MPS, including the group’s BM Investment Solutions offering for financial advisers, grew to £4.3bn in funds under management.

Last Autumn Brooks announced that it would reduce its headcount to cut costs annually by £4m. The firm axed around 55 jobs, about 10% of its workforce, as part of the cost-saving measures.

The trading update said that the strategic review of the firm’s operations was progressing and that it will continue to realise the cost benefits of its organisational changes for the remainder of the year.