CompaniesAug 20 2014

IFP reports first loss in five years after reshuffle

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The Institute of Financial Planning made a consolidated loss of £17,589 before tax last year, its first loss for five years which the body blamed in part on costs incurred for a reorganisation of the senior team amid the ongoing absense of chief executive Nick Cann.

The 2013 annual report stated that the consolidated deficit was “disappointing” after four years of consistent profitability, although it was well covered by the profit and loss reserves that have been built up and the organisation’s cash position remains strong.

IFP branded business made a loss of £20,296, offset slightly by a profit of £2,706 made by Financial Planning Standards Board UK.

Rebecca Taylor, IFP president, explained that after long-standing chief executive Nick Cann suffered a major stroke in March 2013 and has been unable to return to work, there was a reorganisation of the accountabilities of staff, with additional costs being incurred.

Steve Gazzard, interim IFP chief executive, said: “The decision was made to continue to invest in service provision and marketing for membership growth, and, with increased premises costs, this all contributed to the loss which is well covered by accumulated reserves.”

The organisation moved to new headquarters in January.

The IFP operates on a ‘not for profit’ basis and admitted facing many challenges last year. It did however, see a rise in membership, with the total growing to 2,046. The numbers of accredited financial planning firms also grew steadily, which it said reflected the value firms place on gaining accredited status.

The report stated that the organisation believes the UK’s regulatory regime strongly favours the financial planning business model and members have many years’ experience of building long-term relationships with high net worth clients enabled by highly qualified financial planners and paraplanners working on a fee basis.

It also noted that small to medium-sized financial planning businesses have continued to flourish, whilst some larger businesses are trying to develop a viable model post Retail Distribution Review.