Brooks Macdonald has seen its profits before tax tumble to £600,000 for the six months to the end of December 2017.
In the same period for the previous year, the company posted a profit of £8.1m.
The reduced profit was due to a £5.5m increase in the cost of resolving legacy matters.
These matters related to a number of discretionary portfolios formerly managed by Spearpoint, which Brooks Macdonald bought in 2012.
In its results Brooks Macdonald bosses stated: "While we accept no legal liability in these matters, we have a deep commitment to treating customers fairly and seeking to protect our clients' best interests.
"We developed a plan to resolve these matters and accordingly we made a £6.5m provision in the financial results for the year to 30 June 2017.
"However, it became apparent that the calculation of the goodwill offers for the discretionary portfolio clients was affected by quality issues with data derived from legacy systems.
"We therefore initiated a comprehensive review of the data sources, calculations and methodology, requiring extensive use of third party expertise to extract the data, and for advice and quality assurance to ensure that any revision was fair to clients."
The result of the work that Brooks Macdonald has been doing on this has been an increase of £5.5m in the amount it has set aside for this to £12m.
Aside from these legacy issues, Brooks Macdonald saw its funds under management increased by 26 per cent to £11.7bn during the period while its revenue increased by 11 per cent to £48.8m.
The Aim-listed company said its underlying profits before tax - one-off costs and legacy issues are excluded - increased by 3.2 per cent to £8.5m.
Caroline Connellan, chief executive of Brooks Macdonald, said: "We have maintained organic growth momentum across all our segments, alongside above-benchmark investment performance, reflecting the strength of our core offerings and relationships.
"We have made good progress with our investment programme to enable the business to grow sustainably while enhancing efficiency. Our medium-term focus is on delivering improved operating margins."
Brooks Macdonald also announced that it had hired Adrian Keane-Munday as managing director of its financial planning division from HSBC in order to "lead the development" of that part of the business.
In its results Brooks Macdonald said: "The need for advice for high net worth individuals continues to grow and our financial planning business has had a good period as well as being a significant introducer of investment management business across the group."