The continuation of higher costs in WH Ireland private wealth management unit and a decline in execution-only business means the firm is set to post a loss for the last 16 months.
In January, it was reported that the cost of growing and developing this division were greater than expected for WH Ireland last year, impacting the company's results.
According to a trading statement published today (17 May) for the 16-month period ending at 31 March 2018, WH Ireland results are also being affected by reduced transactions from the corporate and institutional broking division.
As a result WH Ireland warned it will post a loss when their results are revealed but bosses expect the situation to be reversed by year-end on March 2019.
The firm's board anticipates that the combination of lower costs in the private wealth management division, together with more normalised levels of transaction revenue from the corporate and institutional broking unit, will lead to "strong progress in the group's profitability during the current financial year".
During the last 16 months, WH Ireland continued the transition of its private wealth management division to an advice-led, fee-driven model.
The fee-paying service propositions (discretionary and managed advisory offerings) account for more than 70 per cent of the firm's total assets under management at the end of March, helping to boost fee income by over 20 per cent relative to the previous 12 months.
Over the same period, WH Ireland's wealth planning team has witnessed a 50 per cent growth in fees.
The firm stated: "As expected, execution-only assets have declined significantly as we introduce platform fees for the first time for this service proposition."
WH Ireland added that recurring fee revenue now accounts for more than 60 per cent of total revenue in the wealth management unit, and the division's focus on margin improvement will continue during the current financial year.
maria.espadinha@ft.com
