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WH Ireland issues profit warning as costs increase

WH Ireland issues profit warning as costs increase

Wealth manager WH Ireland has warned that 2017 will be less profitable than expected as the costs of changing to its new business model mount up.

The company has issued a trading statement for the 12-month period ending in November 2017 but has not published any figures for its financial performance.

WH Ireland is transitioning its private wealth management division from an execution, commission-based model to a discretionary, advice-driven fee model.

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In its statement, the company said: "The group has had an improved year from a revenue perspective and the board expects this positive momentum to continue into 2018.

"Costs associated with the transition to the new model and Mifid II regulatory changes were higher than anticipated and these exceptional costs have adversely affected profitability in 2017.

"Duplicated costs incurred during the period will decline significantly in 2018 benefiting future profitability."

The company said its discretionary investment proposition is continuing to grow and fee income across this division has risen by more than 15 per cent compared with the previous year.

Meanwhile its wealth planning team which has seen growth in revenue of around 40 per cent over the same period.

WH Ireland's corporate and institutional broking division has seen "strong growth" in success fees, secondary commission flows and market making activity, with the number of corporate grown to 86.

WH Ireland said that as a result of its decision to change its accounting period, its current financial year is being extended by 16 months, meaning its results for the 12-month period to November will be released on Monday 29 January.

Earlier this year WH Ireland announced it had swung back into profit on the back of increased revenues, posting a profit of £324,000 for the six months ending in May compared to a £1.5m loss for the same period last year.

At that time the company had assets under management of £3.1bn.

damian.fantato@ft.com