Wealth manager Brewin Dolphin has written down £33.7 million after abandoning plans to implement a new stockbroking software system.
The firm revealed a 70 percent pre-tax profit slump after pulling the plug on the troubled JHC Figaro migration in its financial results posted yesterday.
The £12.1 million IT project to migrate its back office system from Fiscal to Figaro’s stock broking and wealth management software began in 2011 with the hope it would improve operating margin.
However it was plagued with delays, in addition to design, configuration and testing problems.
After deploying the operating system in one area of the business, it was decided that it would not follow through to remaining departments as the board “no longer believed it would be an appropriate operating system for the Group’s discretionary wealth management business or to support the Group’s strategic aims and new margin target of 25 percent by 2016.”
Further, the system “would present the business with unacceptable risks.”
Brewin Dolphin said it has changed its approach to IT, which is now based on enhancing existing architecture and “making targeted replacements and upgrades where necessary.”
It is piloting a new portfolio risk management system which will assess and manage client’s assets.
Image: ©Brewin Dolphin