The IFA firm suffered writedowns worth a significant £571,739 in 2008 compared with just £50,000 the previous year.
Revenue per adviser fell from £273,000 in 2007 to £233,000 last year.
The firm says its plans to grow organically during 2008 were scuppered by the economic conditions.
Being cautious in its expansion plans and reducing overheads through the redundancy programme it announced in December helped it mitigate the effects of the downturn, it claims.
The firm expects to remain profitable throughout 2009, adding that it will consider acquisitions where it can see “clear benefits”.
Chief Executive Andrew Fay says: “Cavanagh has made good progress in strengthening the group’s structure through developing a comprehensive range of solutions to penetrate new markets whilst enhancing existing client relationships.
“The group’s results for the first quarter of the new financial year coupled with the business opportunities available to Cavanagh indicate that the group will remain profitable through 2009.”