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Falcon wind-up sees Lighthouse post £2.4m loss

Lighthouse posted a £2.4m loss for the first half of 2011, compared to a £117,000 profit in the first half of 2010.

The loss is due to a £2.9m charge to wind down IFA group Falcon, including provision for any potential redress.

The results say: “Certain aspects of Falcon’s historical trading have become the subject of an internal review.

“As a consequence, the board has deemed it prudent to make a provision of £2.5m in respect of closure costs and other potential liabilities.

“Together with other non-recurring Falcon expenses of some £400,000 already incurred, this resulted in an aggregate non-recurring charge of £2.9m.”

Lighthouse executive chairman David Hickey says: “Falcon has been around for 28 years. £100,000 a year gets you to £2.8m. We expect this should be enough to cover any suggestions of complaints or redress over the next few years.”

Lighthouse has seen adviser numbers drop from 820 in the first half of 2010 to 713 in the six months to June 30. Revenues fell from £32.6m to £30.9m.

Hickey expects adviser numbers to remain steady between now and January 1, 2013.

He says the transition to a retail distribution review model has been “extremely disruptive” and hints that the firm is likely to have a restricted advice offering after the RDR.

Hickey says: “The requirements to demonstrate independence are going to be very tough following the RDR. If we have 10 or 20 per cent of our advisers asking for a restricted proposition, we will look very seriously at that.”


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