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 last week, 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 with 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 RDR.
“In contrast to this position, I am pleased to say we have achieved strong growth. This has been achieved through a combination of acquisition and organic growth.”
In June, Intrinsic announced plans to split its distribution model into four channels and unveiled a new executive management team as part of the company’s RDR strategy.
The four channels are an independent arm under the brand Intrinsic Independent, a restricted arm branded Intrinsic Financial Planning, a protection arm branded Intrinsic Protect and a mortgage arm branded Intrinsic Mortgage Planning.
Yellowtail Financial Planning managing director Dennis Hall says: “Intrinsic members should be asking serious questions about the rise in the complaints provision but at least it is making a profit and there are not many networks that can say that.”