Investment management firm Brewin Dolphin expects a £32 million write-down after uncovering a ‘number of issues’ with its Figaro software system.
The implementation of the ‘straight through processing’ software from JHC Systems into its execution-only StockTrade system revealed problems with the “functionality and robustness” of the software.
These issues are now taking a “additional time and resources” to address and will no longer be rolled out more wiely across its business, the financial services firm said in a statement to the London Stock Exchange.
“The board believes the decision to cease the roll out of Figaro is in the best commercial interests of the group,” said Brewin Doplhin.
It had started the implementation of Figaro in 2011 as part of an initiative to improve operational efficiency by streamlining business processes and help improve the group's operating margin from 15 percent to 20 percent.
The software will be kept running on its StockTrade system, but is no longer deemed “an appropriate operating system” for its discretionary wealth management business.
Brewin Dolphin will instead upgrade existing software to commercially available versions, which the board believes can without expanding its capital expenditure budget.
It will also have to make payments of around £15 million over the next ten years to settle its contract with JHC for the use of Figaro in its wealth management business.