James Hay has cut its profit forecast for 2014 as pressure on margins and interest incomes weighs on the Sipp provider.
The firm’s parent company IFG’s third quarter interim management statement, published this morning, reveals assets under administration at James Hay rose from £15.3bn in December 2013 to £16bn on 31 October 2014.
New Sipps in the year to 31 October totalled 5,200, higher than the full year figure of 5,071 recorded in 2013. This year’s number has been boosted by the transfer of 550 Sipp plans from Capita.
Saunderson House, IFG’s UK-based advice business, has added 222 clients during the period, pushing assets under advice from £3.2bn at the start of the year to £3.6bn in October.
Despite this, the firm says profits will be below market expectations this year, with interest income due to be £1m lower in the second half of 2014 compared to the first half.
“Pressure on margins and interest income in James Hay, as highlighted in H1, has continued,” the firm says. “This, together with our investment in technology and staff, has reduced James Hay’s forecasted profitability for 2014.”
The firm adds: “In overall terms the adjusted group operating profit pre-tax will be marginally below 2013 on a re-presented basis, though after-tax earnings will be impacted by a materially higher effective tax rate, linked to the disposals of businesses.”
Earlier this year, IFG sold advice businesses IFG Financial Services, John Siddalls and Berkeley Jacobs to Ascot Lloyds in a deal that could eventually be worth £8.9m.