Major infrastructure investment saw national IFA Inter-Alliance make a loss of £2.8m in the first half of the year despite nearly doubling turnover.
The result is a sharp fall from the £700,000 profit for the same period last year. But turnover soared by 91 per cent from £13.7m to £26.2m and there was a 20 per cent increase in annualised income per registered individual from £60,000 to £72,000 from £60,000.
The company says the loss is due to substantial investment in infrastructure, including offices and technology, to cope with the growth in the number of RIs from 631 to 1,035.
The loss includes “exceptional items” of £700,000 from the cost of integrating advisers from the Lincoln and Prudential salesforces and overseas acquisitions.
Inter-Alliance is taking on up to 250 ex-Pru salespeople, including, it says, some of the company's top performers. It had aimed to recruit the entire salesforce but says about 25 per cent of the 1,300 Pru sales force have retired or left financial services and many of the rest are still deciding their future.
Group chief executive Stuart McGreevy says: “We have considerably increased the number of practitioners, offices, clients and turnover. Due to considerable market opportunities arising which will accelerate the group's growth, we have made substantial investment in infrastructure.
“Consequently the group has reported a loss in the first half of 2001. However, we continue to achieve our organic growth objectives.”