Wealth management company Ashcourt Rowan has reported a £1.2m loss before tax for the six months to 30 September 2012, due in part to a £412,000 fine from the Financial Services Authority relating to group company Savoy Investment Management.
Kenneth West, chairman of Ashcourt Rowan’s board, said in his statement within the company’s results that Savoy had been served with a ‘section 166’ order “just a few days” into his reign last year as part of the regulator’s thematic review of investment suitability. The fine represents the outcome of that skilled person’s review, he added.
However, Mr West said the company had already been served a similar order in 2009, but had failed to implement some of the changes it had promised.
Regarding the FSA fine, Mr West said: “This is clearly a significant fine but we have chosen to accept the FSA’s findings and agree an early settlement with them to enable the business to move forward.
“In the past our processes and systems were not as robust as they should have been and this has been a key focus of the change management programme over the past year.
“It is absolutely right that we should resolve legacy issues like these ones whilst aiming to build best in class administration and compliance systems for the future.”
Regarding the results more generally, Mr West argued that the company had done well to produce “small but positive” earnings of £500,000 before interest, tax, debt and amortisation, which he said reflected underlying strength within the business following its restructuring.
This figure is a significant improvement on the loss of £200,000 reported in the first half of the previous year.
Company revenues were £16.1m, representing a hit of 12.5 per cent which group chief executive officer Jonathan Polin said was an anticipated reduction to income as the firm “exited people from the business who were unable, in our view, to meet the high bar of ethos, culture and accountability that we require”.
Following its preliminary results delivered in July of this year, the company undertook an extensive cost-cutting and restructuring programme.
Mr West announced he will retire from the company’s board, handing the reins to former Invesco UK chief executive officer Hugh Ward on 1 January.
He said: “I stepped in as chairman last year, initially on an interim basis, when the group needed steadying. With that task complete I am happy to hand over to [Mr Ward].”
According to the results, Ashcourt Rowan is also now fully compliant with the Retail Distribution Review.