George Higginson, chief executive officer of parent company Sesame Bankhall Group, said the firm was determined to ensure that “the right consumer outcomes are being delivered and can be clearly evidenced” after the regulator slapped the network with a £6.03m fine in June for mis-selling Keydata products.
In a two-page list of key points from the 2012 financial statements, the firm stated that significant investment in technology and services had also contributed to the loss.
Mr Higginson stressed that a “robust” Sesame network was part of the “strong” Sesame Bankhall Group, which saw profits of £4.1m in 2012. He added: “In challenging market conditions we have continued to see healthy increases in revenue, adviser productivity and new advisers. Through our multimillion pound investment in technology and a new broader range of services for advisers, we are positioning the group strongly for the future.”
Sesame‘s number of registered individuals joining the firm increased from 2222 in 2011 to 2252 in 2012, despite the number of investment advisers falling by 26.6 per cent.
The key points document stated that the fall was mainly due to RDR, rising regulatory costs and “a hardening professional indemnity insurance market”.
John Cupis, managing director of mortgages, said the decrease was offset by a “record” number of mortgage and general insurance advisers joining the firm, a 34.3 per cent increase.
The company also reported a 27 per cent rise in mortgage business in the first six months of 2013, and Mr Cupis predicted there would be similar “encouraging” results for the next six months due to a healthier mortgage market.
He added: “Double-digit growth in the first half of this year demonstrates how the investments made in our new broader mortgage proposition are paying dividends.
“We have secured more exclusives and bolstered our protection and general insurance offerings in 2013. SBG’s new mortgage valuations, specialist lending and legal services are also attracting great support from advisers and lenders with record growth in all areas.”
Bob Riach, director of Lincolnshire-based Riach Independent Financial Advisers, and a member of Sesame, said: “The Keydata affair has affected Sesame a lot so it’s easy to see why there is a drop in profits, but that has now been resolved. There has been a lot of investment into back-office systems, tightening up procedures so that it makes the network much stronger further down the line in terms of compliance. I can also see mortgage business increasing as the year goes on as Sesame capitalises on the recovery in the housing market.”