Merchant House Financial Services, the IFA arm of Merchant House Group, has revealed that it has cut a number of advisers deemed ‘low profit’ despite reporting increased revenue for the first half of its financial year.
Revenue to the advisory firm grew by 22 per cent in the six months to 30 June 2012, with sales reaching £2.7m compared to £2.2m in the previous year. However the company continues its efforts to cut costs, which includes dropping “low profit” advisers.
Administrative expenses of more than £2.1m coupled with just over half a million pounds spent on acquisition of IFA members and clawbacks pushed the company into a loss before tax of almost £1.5m.
According to its interim statement, the company has also “made progress” towards readiness for the incoming Retail Distribution Review.
In the company’s statement, chairman James Holmes says: “This is against a generally accepted opinion that much of the IFA market still has some way to go to be RDR ready.”
Earlier this month (1 October), Merchant House Group reported a loss of £5.6m for the whole of 2011, including a loss of £2.4m incurred by Merchant House Financial Services which it attributed in large part to the arduous process of re-authorising the advisers in a newly-acquired firm.
