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Openwork pledges to reverse £8.5m losses by 2013

Openwork’s Philip Martin has said that the advisory network will hit profitability over the next 18 months, pledging to turn around the large losses made by the firm in 2010.

Accounts for 2010 showed pre-tax losses at Openwork increased from £5.6m to £8.5m, while adviser numbers fell from 2,485 in 2009 to 2,060.

Mr Martin, the company’s marketing and propositions director, said the network was in a far fitter position now with 2,400 advisers and costs a third of what they were when the business launched in 2005.

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He said this, plus the continued support of Zurich, which owns a 25 per cent stake in the network, would help push the business into the black in 2013.

Mr Martin said: “What is key for us going forward is for us to become profitable because at the moment it is not. Within a year-and-a-half we will be.

“Profitability is very important. In buying 2plan [the Leeds-based IFA business acquired in July 2011] we now have a model that includes IFA, single-tied and multi-tied that any adviser firm can adopt. We are unique in this - there is no other network offering that breadth of proposition.

“Openwork has gone through a dramatic period of shrinking our cost base. It is about a third of what it was when we launched.

“We have traditionally lived off commission. Moving forwards we will have to live in a different way. Beyond RDR it will be important to earn from different sources if we are to move towards profitability.”

Mr Martin said part of shifting where Openwork’s cash comes from was working with Octopus on the launch of distributor influenced funds. The two firms have been working together on multi-manager funds since 2008.