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European Wealth reports loss of £1m

European Wealth reports loss of £1m

European Wealth Group Limited has reported a loss before tax of £1m for 2015, compared with a £0.3m loss in 2014.

This was despite financial planning recurring revenue at European Wealth Group Limited increasing by 72 per cent in 2015.

The business blamed costs associated with the three acquisitions it made last year plus lower than expected trading volumes.

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In July the group bought Greensnow Limited (trading under the name of ISM Solutions) which added £70m of funds under influence and a young client base with a significant proportion of recurring revenue.

In September the group completed the acquisition of the financial planning clients of Bells Solicitors, which added £43m of funds under influence, and in November it bought XCAP Nominees Limited, the client list of Hume Capital, bringing £30m of funds under management.

Funds under management at the wealth management firm increased by 20 per cent to £1.2bn in 2015, compared with £1bn in 2014.

Staff numbers increased from 69 in 2014 to to 82, of which 49 per cent were fee earning.

AJ Morton, executive chairman of European Wealth, said the group’s loss was down to the fact many of the new revenue generating staff took longer to build an established client base than originally anticipated.


 

Mix of staff

2015

2014

Fee earning

40 (49%)

32 (46%)

Administration

42 (51%)

37 (54%)

Total

82

69

 

 

 

However, he said it was pleasing to see revenue starting to be generated from those clients.

Looking to the future, Mr Morton said following the challenging trading environment in the second half of 2015, and the current economic and political uncertainties in various parts of the globe, predicting how 2016 was likely to unfold was particularly difficult.

But he added he expects the impact of the Retail Distribution Review to continue to be felt in the financial planning industry for the foreseeable future.

Mr Morton said: “The revenue generated by this division is increasingly adopting the profile of the fund management business with clients paying a percentage fee depending on the level of service agreed and the size of the assets.”

emma.hughes@ft.com