Lighthouse Group saw its profits increase by 119 per cent during 2016, results published today (21 February) show.
Profit before tax increased to £1.9m from £900,000 in 2015, despite revenue decreasing by £1m.
Richard Last, chairman of Lighthouse, said the increase in profits was achieved by focusing on specific parts of the business.
He said: “The increase in average annualised revenue per adviser and change in revenue mix towards higher margin divisions largely offset the impact of the removal of platform-based trail income arising from the ‘sunset clause’ introduced by the FCA to leave revenues and gross margin broadly unchanged.
“The above, together with an on-going focus on the group's operational costs, resulted in a substantial increase in earnings.
“The continuing opportunities in the personal and corporate pension markets and entry into financial product solutions with the Luceo Funds, leaves Lighthouse well positioned to deliver future growth.”
Revenues decreased across all of Lighthouse’s three divisions, with Lighthouse Financial Advice, the company’s national advice business, generating gross revenues of £15.7m, down by £400,000 because of the impact of the ‘sunset clause’ removal of historic trail commission.
Operating costs decreased in 2016 by £900,000 to £12.3m due to lower complaint volumes, leading to lower use of current professional indemnity insurance arrangements, and increased debt recoveries.
In September Lighthouse launched Luceo Asset Management, a wholly-owned subsidiary which will provide in-house investment products to the firm’s clients.
The funds are managed by Octopus Investments and sit within each of the three most popular risk bands for Lighthouse clients.
They are initially be available through a new platform set up with Zurich called the Lighthouse Zurich Platform.
Lighthouse said the new funds have been “well received” by the advisers in LFA, with around £8m having been invested to date.
Malcolm Streatfield, chief executive of Lighthouse, said: “Further funds within the Luceo range will be developed and launched in the forthcoming months, both to widen the current active product set and also to provide solutions in other areas such as low cost/passive managed and regular income as well as in the discretionary and alternative asset class parts of the market.”
damian.fantato@ft.com
