Brewin Dolphin Holdings plc

12/03/2021 | Press release | Distributed by Public on 12/03/2021 14:01

Pandemic has forced charities to re-think investment approach, says Brewin Dolphin

Record discretionary fund inflows and delivering on our strategic growth ambitions

  • Strong total discretionary net flows of £1.9bn (FY 2020: £0.9bn), representing an annualised growth rate of 4.6%.
  • More than half regard investment income as their key risk
  • 34% say they are considering moving to a total return strategy
  • Shift to ESG considerations is notable - 30% in 2021 compared to 13% in 2019 and 16% in 2017

According to wealth manager Brewin Dolphin's latest research, almost two thirds (64%) of charities have recently debated or revised their investment policies in light of the pandemic. Whilst capital preservation and generation of income has historically been the primary investment objective of over half of those who took part in the research, over a third are now considering adopting a total return strategy as a result.

The research1, which involved an online survey of more than 370 charities alongside interviews with charity trustees, directors and consultants, revealed that 53% of respondents are concerned about the income they receive from investments. Just over half (54%) of charities reported the need for income as their main financial concern. This was found to be more acute among service providers (58%) than grant makers (46%), who have had so many sources of income affected by the pandemic.

1Conducted bi-annually by Brewin Dolphin, the research sought to understand how charities are coping and adjusting financially and to what extent their 2019 concerns had altered.

Ruth Murphy, head of charity development at Brewin Dolphin, said: "Our survey results show that the short-term market falls in early 2020, and the longer running theme of reduced dividend earnings, have clearly had an impact on charities. Indeed, almost two thirds (64%) had recently debated or revised their investment policy statement as a result."

According to the research, over half (55%) of respondents' main investment objective is to preserve capital whilst generating income, as opposed to adopting a total return strategy. "We know from client discussions that this is a topical issue and the research confirms that more than 1 in 3 (34%) are considering total return in light of the reduction in dividend income in 2020. The pros and cons of dipping into capital is likely to be an area many charities will need to address in the coming years, particularly if other funding sources and natural investment income levels remain under pressure. A total return strategy should always be considered, even if it is subsequently ruled out," explained Ruth.

She added: "It not only allows for a rounded view of gains, be they from income or capital growth, it can help charities with their budgets as they can set an overall withdrawal rate from their investments for the coming year."

The survey also revealed that a third of respondents regarded Covid's impact on income as a concern. "I think this shows that the charity sector is learning to live with Covid and its impact. It is also clear how much the sector has tried to adapt and adjust plans," explained Ruth. "In addition, we can see volatility concerns appear to have fallen this year with 33% of charities saying it is a worry compared to 44% in 2019 and 41% in 2017, possibly replaced by some of the pandemic worries."

In terms of investment-specific concerns, low growth and low interest rates were cited as a worry for 39% of respondents, whilst absolute loss and inflation were regarded a concern by 23% and 22% respectively.

Interviewees agreed that it is not possible to avoid all risk; and that managing it correctly alongside a long-term investment focus are most important. This allows all charities, particularly those that aim to exist in perpetuity, to ride out market peaks and troughs and to consider a higher level of risk for greater reward.

According to the survey, 69% said their investment policy statement contained ESG or ethical investment criteria. This is slightly lower than the 77% who made the same statement in 2019. Despite negative screening being the specific approach adopted by many respondents (56%), the shift from negative screening to ESG considerations is notable this year - 30% compared to 13% in 2019 and 16% in 2017.

Ruth commented: "We can detect more optimism in our findings this year. Despite their financial challenges, the majority (58%) of respondents are confident that funding levels will enable them to meet their charity objectives - up from only 50% in 2019, but down from 86% in 2017. Above all, the insights highlight the importance of a holistic approach to financial planning and investment, to not only manage the challenges ahead, but also make the most of opportunities that arise."

View the report here



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  • The opinions expressed in this document are not necessarily the views held throughout Brewin Dolphin Ltd.
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  • This information is for illustrative purposes only and is not intended as investment advice.
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For further information, please contact:
Richard Janes [email protected] / Tel. +44 (0) 20 3201 3343
Siân Robertson: [email protected] / Tel: (0) 20 3201 3026
Anita Turland: [email protected] / Tel: (0) 20 3201 4263
Payal Nair [email protected] / Tel: +44 (0) 20 3201 3342


About Brewin Dolphin
Brewin Dolphin is a UK FTSE 250 provider of discretionary wealth management. With £56.9* billion in total funds, we offer award-winning, personalised wealth management services that meet the varied needs of our clients including individuals, charities and corporates.

We give clients security and wellbeing by helping them to protect and grow their wealth, in order to achieve their goals and aspirations. Our services range from bespoke, discretionary investment management to retirement planning and tax-efficient investing. Our focus on discretionary investment management has led to significant growth in client funds and we now manage £49.8* billion on a discretionary basis.

Our charity business is a core channel for Brewin, managing £4.2bn on behalf of more than 1600 charities across the UK. The specialist Charity Team of 50 work from eight strategic locations, bringing a personal portfolio service, with charity expertise, to their region.

In line with the premium we place on personal relationships, we've built a network of 34 offices across the UK, Jersey and Republic of Ireland, staffed by qualified investment managers and financial planners. We are committed to the most exacting standards of client service, with long-term thinking and absolute focus on our clients' needs at the core.

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*as at 30th September 2021.

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