Foster Denovo, the financial advisory, employee benefits and asset management group, has announced profits were down more than 80 per cent in 2013, primarily as a result of substantial investment activities.
According to a statement, pre-tax profits at the group were £246,000 for the year ended March 2013, down from close to £1.3m in 2012.
The firm said this reflected “significant investments” across the group and “increased provisions” in Foster Denovo Ltd, its financial advisory business. Total provisions excluding drawdowns during the year rose by around £40,000 by year’s end to a little less than £2.1m.
The firm added that it expected some of this provision to be “reversed in future periods”.
Revenues at the group were strong, with an increase of 15 per cent to almost £25m across the group, which includes fund manager Sequel Investments. Advice arm revenues rose 8.4 per cent on the back of “increased adviser numbers and productivity”.
In the lead up to the implementation of the RDR in 2012 the firm announced it would be seeking to boost adviser numbers, and in 2013 it said it was looking to recruit more young people into the industry through a partnership on a degree programme.
Among the investments that have been made the company cited Sequel Investments, which has been making the transition to a new Oeic structure during the last 12 months. It said the move had taken “significant investment”.
The group’s employee benefits arm also invested in a new proposition designed to meet the auto-enrolment needs of SMEs, including compliance with regulations and the provision of a qualifying workplace pension through a predominantly online approach, the firm said.
Other national firms have hit trouble in the recent past as a result of growing provision for claims against legacy sales.
Sesame made a £19m loss for 2013 on the back of its FCA-enforced pension transfer review, while national advisory business Lighthouse recently incurred a further cost of £310,000 towards annual losses of £1.6m.
Commenting on the revenue growth figures, Roger Brosch, chief executive at Foster Denovo, said: “The industry has gone through real transition, and we have invested heavily during this period. We look forward to continuing to progress the business during 2014 and beyond.”
