National advice firm LEBC has warned one of the biggest risks it is facing is its ability to recruit "sufficiently high calibre" advisers, as profits at the company tumbled more than 100 per cent last year.
The adviser faced a challenging 2019 after voluntarily relinquishing its pension transfer permissions in September as a result of the Financial Conduct Authority's defined benefit review.
This was followed by reports the move had led to a raft of redundancies and staff walkouts and changes to its bonus structure reportedly creating ill feeling at the company.
LEBC said its staff had left on good terms and that the change to the bonus structure was so staff would not be incentivised to create an income for the business, but do so in a compliant way.
In accounts published on Companies House for the year ended September 2019 chief executive Jack McVitie admitted LEBC had suffered a "disappointing" year, returning an operating loss of £339,973.
This was a drop of 108 per cent from its £4,282,321 operating profit in 2018.
LEBC said it had incurred exceptional costs of £692,637 last year with the poor results predominately attributed to Brexit "uncertainty and nervousness" and changes in the requirements for advising on defined benefit transfers.
Mr McVitie said political uncertainty had also caused individuals to defer investment decisions, thereby delaying revenues, and pointed to the growing cost of delivering defined benefit transfer advice.
In October last year LEBC's parent company B.P. Marsh & Partners confirmed the adviser had lost 20 per cent of its revenue by agreeing to give up its defined benefit pension transfer permissions.
In the company's results Mr McVitie also said one of the company's biggest uncertainties going into the coming year was its "ability to recruit sufficiently high calibre advisers to meet growing demand for advice."
But he added: "Our advisers are all salaried and are given full support in professional development.
"We are grateful to all our staff for the loyalty that they have displayed, for their continued hard work, dedication and commitment during this challenging year."
According to the results LEBC's directors expect the company to return to profitability in the coming year and beyond.
rachel.mortimer@ft.com
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