View more on these topics

City spurns IFA sector as share prices plummet

Listed IFAs have fallen out of favour with the City, with some seeing their share prices halve this year.

Millfield’s share price has plummeted from a year-high of 93.4p to 23.5p and has more than halved from 59p on August 5 when the merger deal with Inter-Alliance went ahead.

Berkeley Berry Birch’s share price has fallen from a year-high of 28p to 15p while Lighthouse has seen its share price fall by 26 per cent from 27p to 20p.

Cavanagh’s share price has fallen by around 40 per cent from 221.5p to 130p.

Durlacher analyst David Pannell believes these falls in share price reflect difficulties that quoted IFAs have had in generating profits, coupled with concerns about funding from the City. He says that as long as IFAs struggle to make profits they will continue to struggle with their share prices.

Cavanagh saw losses rocket from £70,000 to £163;1.08m for the six months to April 30, blaming the rise on the cost of integrating new acquisition Ernst & Young Financial Management.

Lighthouse’s results for the six months to June 30 show losses rising by 40 per cent from £1m to £1.4m, which it says is due to the acquisition of Temple.

Pannell says: “Millfield’s fall in share price reflects lingering doubts about how well funded the business is, as well as the difficulties of integrating two companies. In some cases the listed IFAs’ share price drops reflect funding concerns, in others it reflects concerns about non-existent profits.”

Recommended

Liver Tonic

Alison Bone finds that Royal Liver is already planning to build on its recent entry into protection sector.

Back to basics

The final rules for the basic advice regime were published last week but what changes have been made since the FSA first put forward its controversial proposals and asked the industry for opinions?Aifa is not sure that much progress has been made and director of policy Fay Godd-ard is not impressed: “The key points have […]

IFA seeks source of Brain problems

Low-income workers with stakeholder pensions who do not increase contributions over time will pay more in charges than they do in contributions in the latter years of their saving, warns B&CE.

Neptune launches Japan Institutional Fund

By Chris Taylor, Investment Director, Head of Research Neptune is excited to announce the launch of the Japan Institutional Fund on 22 June, having disclosed to the market in March its intention to offer the product. The Fund will be managed by the highly-regarded Chris Taylor, Head of Research and manager of the long-running Japan Opportunities Fund. It will invest in the same underlying stocks as the Japan […]

Newsletter

News and expert analysis straight to your inbox

Sign up

Comments

    Leave a comment