Adjusted operating profit fell 8% to £21.7m (2021: £23.7m) for Close Brothers Asset Management (CBAM) for the year ended 31 July.

Operating income for the asset manager’s personal financial advice and wealth management business held steady at £36.1m (2021: £36.4m).

The firm continues to hire more financial advisers, as well as considering acquisitions in the advice sector, according to Close Brothers’ annual financial report released today.

Total operating income for the asset management business rose 6% to £148.0m (2021: £139.4m), reflecting positive net inflows and market movements in the first half of the year, despite falling markets.

CBAM said the fall in its operating profit was driven by negative market movements and higher staffing costs for the second half of the year.

Adjusted operating expenses increased 9% to £126.3m (2021: £115.9m), driven by higher staff costs, primarily reflecting the current inflationary environment and new hires. As a result, the expense/income ratio grew to 85% (2021: 83%).

The asset management business saw net inflows of £844m for the year, with a net inflow rate of 5% (2021: 7%).

Total managed assets decreased 2% to £15.3bn (2021: £15.6bn), with negative market movements of £1.1bn offset by net inflows.

Total client assets, including advised and managed assets, fell 3% to £16.6bn (2021: £17.0bn).

CBAM said it had completed several major technology projects within the year, including completing its major re-platforming project to rationalise legacy systems and increase efficiency.

The firm has also added a digital portal to improve functionality and customer experience.

Adrian Sainsbury, CEO of parent firm Close Brothers, said the group remained confident about the future for its wealth management business.

He said: “Our asset management business is well aligned with the long-term trends in the wealth management space and we will continue to invest to support its growth potential. We remain committed to building on our excellent track record of increasing client assets organically, through the continued selective hiring of wealth management professionals, as well as through in-fill acquisitions.

“In asset management, we continue to invest to support the long-term growth potential of the business. Whilst the business is sensitive to financial market conditions, we remain committed to driving growth both organically and through the continued selective hiring of advisers and investment managers, and through in-fill acquisitions.”

CBAM provides personal financial advice and investment management services to private clients in the UK, including full bespoke management, managed portfolios and funds, distributed both directly via its advisers and investment managers, and through third party financial advisers. CBAM is part of the Close Brothers group.

The parent firm saw group adjusted operating profit fall 13% to £234.8m (2021: £270.7m).