Legal & General-owned platform Cofunds saw pre-tax profit fall 17 per cent in 2012 despite growing its assets under administration by 33 per cent.
Pre-tax profit fell from £7.1m in 2011 to £5.9m last year, while AUA increased from £35.8bn to £47.6bn.
The firm’s accounts say AUA was lower than expected, although the directors feel it was satisfactory given the market conditions.
Cofunds’ current AUA stands at around £55bn. The platform admits it expects market conditions to remain challenging.
A statement in the platform’s accounts says: “The group expects that existing competitors and new market entrants will continue to provide strong competition.
“Consistent with the broader economic environment, market conditions will remain challenging.”
Cofunds adds in the statement that it remains in discussion with the Financial Conduct Authority about the effect incoming platform rules will have on the industry.
Legal & General completed its £131m acquisition of the 75 per cent of Cofunds it did not own in March following months of negotiations.
Following the deal, a number of senior Cofunds staff have announced their departure from the platform.
These include chairman Charlie Eppinger, chief executive Martin Davis, head of operational services Stephen Mohan and director of marketing Verona Smith.
Murphy Financial associate partner Adrian Murphy says: “The fall in profit is worrying especially when you consider that Cofunds increased assets under administration so significantly.”