Wealth and investment manager Brooks Macdonald has today reported net outflows of £70m for the first quarter of its financial year ended 30 September.

Group CEO Andrew Shepherd said “difficult” markets and high interest rates were affecting client behaviour causing “short term pressure on flows.”

He said during the quarter clients increased cash holdings, paid off debt and invested in money market funds to avoid volatility.

The group saw net outflows of £70 million or 0.4% during the quarter.

Gross inflows were level with the same period last year, but outflows were higher, driven by net outflows of 4.6% in Brooks’ UK Funds business.

Brooks said this was consistent with trends seen across the asset management sector.

Despite the outflows there was positive investment performance in the quarter of 0.5% which helped increase the group's closing Funds Under Management slightly by £0.1bn to £16.9bn (30 June 2023: £16.8 billion).

UK discretionary FUM increased by 0.6% over the quarter, with positive net flows driven by Brooks’ MPS Platform.

The company said its pipeline for the full year remained “robust” with continuing strong gross inflows and positive net flows expected for the full year.

Andrew Shepherd, CEO of Brooks Macdonald, said: "I am pleased that inflows continue to be robust, and that our core UKIM discretionary business delivered positive net flows, reflecting continuing demand for our products and services. 

"At the overall group level we saw net outflows, driven by the volatile macroeconomic backdrop and continuing high interest rates, which are leading clients to move towards higher cash holdings, debt repayment and investment in money market funds.

"Our people continue to engage closely with our clients and introducers to help guide them through these difficult markets. In our view, the need for high quality financial advice and robust long-term investment management is now greater than ever. Given that, combined with the supportive demographic trends and the quality and commitment of our people, we remain confident in the group's ability to deliver our ambitious growth strategy."