Intrinsic Financial Services has set aside over £2m for expected complaints settlements in its 2012 accounts as the adviser network reported a 62 per cent profit increase.
Intrinsic’s 2012 accounts, published yesterday on Companies House, show profit before interest, tax depreciation and amortisation increased from £3.2m in 2011 to £5.2m in 2012.
The number of advisers at the network increased 22 per cent during the year, from 1,666 to 2,035, while turnover rose 23 per cent, from £98m to £121m.
However, while profits and adviser numbers have continued to rise, so has Intrinsic’s complaints provision. It has set aside almost £2.2m for complaints in its 2012 accounts, compared to just over £1m in 2011.
Intrinsic chief executive Richard Freeman says: “2012 was another challenging year for our sector. Market data indicates that trading volumes for intermediaries were at around the same level as for 2011.
“Last year I reported that the number of financial advisers operating in the market was down on the previous year. The same is true of 2012 and this picture is likely to continue in 2013, particularly in light of the retail distribution review.
“In contrast to this position, I am please to say that we have achieved strong growth… This has been achieved through a combination of acquisition and organic growth.”
Isn’t that the old banking model? Pile it high, sell it for what you can get and cost in the compensation bill up front?