Lighthouse cites adviser productivity rise as it posts loss

Affinity relationships that give the firm access to some of the UK largest companies and growing productivity among a smaller, but growing adviser base is making Lighthouse the “go-to adviser for Middle England”, Malcolm Streatfield, chief executive of Lighthouse Group, has said.

Mr Streatfield was commenting in the wake of interim results for the Alternative Investment Market-listed company, which revealed it had made a post-tax loss of £232,000 for the six months to end of June 2013, compared to a profit of £59,000 for the same period of 2012.

Revenue fell by around 14 per cent from £27.2m to £23.4m, which the company said was primarily due to an 18 per cent fall in adviser numbers.

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However, gross profit actually rose from £7.3m to £7.5m, overall recurring revenue was up 28 per cent and profit margins were up 32 per cent, compared to 27 per cent in the first half 2012.

Mr Streatfield said the group saw adviser profitability rise 3 per cent to an average of £80,000 a year per adviser across the group, which could only rise as more advisers were brought on board. Adviser numbers are now growing from their lower base, he added.

He also cited an increasing customer base, which has been boosted by a number of ‘affinity’ relationships with the likes of trade union USDAW, which signed a deal with the firm in March of this year.

Mr Streatfield said: “Post-RDR, we have seen that customers have clearly accepted the new world and we are building our new customer base significantly, especially with all the new affinity relationships that we have made.”

He said the USDAW contract as well as a renewal of other trade union contracts has helped provide “a way in” to some of the UK’s largest companies where employees are needing financial advice, particularly as auto-enrolment takes hold.

Mr Streatfield said: “We have organised more than 1,000 surgeries or seminars this year as a result of these affinity tie-ups, and the people attending these are all new potential clients. We are running at more than 10,000 new clients signing up for one-on-one meetings as a result of these surgeries.

“The more advisers we take on as part of our growth plans for Lighthouse Financial Advice, the more surgeries we can hold and the more potential clients we can gain. With major trade unions supporting what we are doing, this supports our position and we are the go-to adviser for Middle Britain.”

According to the results, there was a rise in expenditure on recruitment, training and technology year on year - £900,000 spent from January to the end of June this year, compared with £600,000 over the same period in 2012 – as well as a provision for any potential Arch Cru redress. Overall, the operating costs were at £7.51m compared with £6.53m the previous year.

Mr Streatfield said he envisaged no further need for Arch Cru provision by the end of 2013, and said the board was “comfortable” with the levels of provision already set aside.