Listed IFA’s post-RDR fee push drives 20% profit rise

Listed IFA Frenkel Topping has seen its profit before tax increase 22 per cent to £578,478 in the six months to the end of June 2013, pointing to success in its stated drive to increase the fee it takes post-Retail Distribution Review.

The specialist independent financial advice provider previously told FTAdviser that it has benefitted from a stronger negotiating position and competition among outsourced investment providers to take a 25 per cent increase in the fee it received pre-Retail Distribution Review.

Richard Fraser, chief executive at the firm which specialises in helping clients with personal injury payouts, said IFAs were often paid too little for their services and that the new industry dynamic would allow it take a higher fee while still substantially reducing the TER for clients.

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Its latest results, published on the London Stock Exchange, the firm reported that its gross profit margin for the first six months of this year increased to 60 per cent, from 57 per cent in the first half of 2012.

This resulted in a 22 per cent increase in pre-tax profit based on a smaller 11 per cent jump in group revenue to £2.6m.

The group generated £683,632 of cash from its operating activities during the period, representing a massive 407 per cent increase from the £167,622 generated for the six months ended 30 June 2012.

The group’s funds in its investment management service increased 17 per cent in the first half of this year to £521m.

David Southworth, chairman of Frenkel Topping, said: “The board is pleased with the progress that has been achieved during the period and was particularly encouraged to have been able to announce that funds in the investment management service exceeded the £500m milestone.

“Our market position remains strong, with client retention maintained at an all time high. The board continues to have confidence in the future organic growth of the business, particularly given our strong relationships with litigation professionals and our innovative new technology platform.”