For UK Wealth and Investment managers, the financial adviser is often the most important customer. Independent financial advisers (IFAs) decide which portfolios their clients use, and a manager that wins their trust can grow without building a large direct-to-consumer brand.

Brooks Macdonald (LSE:BRK) and Tatton Asset Management (LSE:TAM) both depend on that relationship, but in different ways. Tatton works almost entirely through IFAs and has grown Assets quickly. Brooks Macdonald combines its own investment managers and financial planners with a fast-growing adviser-platform service, and its net flows turned positive in its latest financial year.

That is why adviser relationships matter for both: they are now the clearest source of net new money in each business. This is an analytical piece based on each company's latest results, not a reaction to a single day's price move.

The adviser channel and model portfolios

Much of the growth in UK Wealth Management has come from model portfolio services (MPS). An MPS is a set of ready-made portfolios that an adviser can place clients into on an investment platform, with the manager handling asset allocation and rebalancing. Fees are typically lower than for bespoke discretionary management, but the service can scale quickly across many advice firms.

The trade-off is Margin against volume. Managers earn less per pound managed, so success depends on attracting a large number of adviser firms and keeping them.

Both companies are London-listed, but on different markets. Brooks Macdonald moved from AIM to the Main Market of the London Stock Exchange on 28 March 2025. Tatton remains quoted on AIM, the London Stock Exchange's growth market, according to its final results. We have not verified either company's current FTSE index membership.

Brooks Macdonald: flows turn positive

Brooks Macdonald's full-year results, published on 3 September 2026, covered the year to 30 June 2026. Funds under management and advice (FUMA) reached a record £21.7 billion, up from £19.1 billion. Net inflows were £226 million, compared with net outflows of £396 million in the previous year.

Revenue rose 6% to £118.1 million. Underlying Profit before tax, which excludes items management considers non-recurring, was broadly flat at £29.0 million, and the underlying Operating Margin eased to 24.6% from 25.9%. Underlying Earnings Per Share rose 6% to 137.9p, and the total Dividend increased to 83.0p from 81.0p.

Statutory figures were much weaker. Statutory profit before tax fell to £3.2 million from £17.5 million after £25.8 million of adjusting items, including £12.1 million of strategic transformation costs and £6.8 million for an organisational restructure. Cash resources fell to £25.0 million from £53.8 million, reflecting deferred Acquisition payments, Capital spending and dividends. Regulatory capital resources were £33.5 million at 30 June 2026 against a requirement, including an internal buffer, of £27.6 million.

The adviser channel drove the improvement. According to the company's fourth-quarter FUMA update, Platform MPS funds reached £8.0 billion, up 35% year on year, with Q4 net inflows of £272 million, while the Bespoke Portfolio Service recorded small net outflows. Chief executive Andrea Montague cited deeper relationships with advisers. The company has set a medium-term target of annualised net flows of 5%, which is well above the result it has just reported.

Tatton: an adviser-only model at higher margins

Tatton's audited final results of 16 June 2026 covered the year to 31 March 2026. Assets under management and influence (AUM/I), which includes assets managed through partnerships, rose 11.0% to £24.216 billion. That headline figure absorbed £3.329 billion of anticipated outflows as a contract with Perspective Financial Group ended; excluding Perspective, underlying AUM/I grew 27.8%.

Underlying net inflows were £2.806 billion (FY25: £2.962 billion). Revenue rose 20.1% to £54.4 million and adjusted operating profit increased 24.1% to £28.5 million, giving an adjusted operating margin of 52.3%. Adjusted fully Diluted Earnings per Share rose 22.3% to 35.05p, and the total dividend increased to 27.0p from 19.0p.

The number of IFA firms using Tatton rose to 1,218 from 1,110. The company described its role as providing a "platform-agnostic" investment service to advisers, not competing with them for clients. It reported AUM/I of £26.486 billion at 12 June 2026 and kept its target of £30 billion by the end of the 2029 financial year.

Two ways to serve advisers

The comparison highlights how Business models shape economics. Tatton's lean MPS model, with no in-house advice or bespoke portfolio arm, produces a margin roughly double that of Brooks Macdonald. On our reading, Brooks Macdonald carries the higher costs of bespoke management and financial planning, but in return can offer advisers and clients a broader service.

The flow gap is also large. Tatton generated more than twelve times Brooks Macdonald's net inflows, although the periods differ by three months and Tatton's AUM/I includes assets it influences rather than directly manages. Brooks Macdonald's Platform MPS growth suggests it is competing directly for the same adviser business in which Tatton is well established.

Risks and dates to monitor

For both companies, adviser relationships can be concentrated. Tatton's Perspective outflow shows how the end of one large Partnership can remove billions of pounds of assets. Price competition in MPS is another risk, as platforms and larger managers offer low-cost portfolios. The Financial Conduct Authority's Consumer Duty, in force since July 2023, also requires firms to show that their products offer fair value, which keeps adviser scrutiny of portfolio charges high.

For Brooks Macdonald, investors will look at whether transformation spending falls away as planned; management said in its results that organic investment would decline to the high single-digit millions in FY27. Its Annual Report and notice of AGM were published on 11 September 2026.

For Tatton, the next checkpoints are its half-year results and progress towards the £30 billion AUM/I target. Market falls would reduce both companies' fee income regardless of flows.

Why adviser relationships decide the outcome

Brooks Macdonald (LSE:BRK) and Tatton (LSE:TAM) make adviser relationships matter because those relationships are producing most of their growth. Tatton's adviser-only model delivers higher margins and larger flows. Brooks Macdonald's return to net inflows shows it is gaining ground through the same channel, but it still has to show that growth can lift statutory profits and margins, not just assets.