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Lighthouse network posts £875k loss; sets aside £5m for complaints redress

Lighthouse Advisory Services, the network arm of Lighthouse Group, made a loss of £875,444 in 2013, nearly doubling the 2012 loss of £484,271.

The group is also made up of a national advice arm and employee benefits division.

The company incurred one-off operating costs of £834,778, including £487,000 spent closing its Exeter office and expanding the Brighton base. A further £347,000 was spent on past business redress, though Lighthouse has not commented on what this relates to.

Lighthouse set aside a total of £8.6m to cover liabilities as at the end of 2013, compared to £5.9m in 2012. Of the total, £5m has been set aside as complaints provision, up from £2.8m in 2012. Another £2.6m has been set aside for protection commission clawback, up from £2.3m in 2012. A further £841,000 has been set aside for “other provisions”.  

Turnover dropped 14 per cent from £52.7m to £45.1m, while cost of sales fell 15 per cent from £47.9m to £40.7m.

Administrative expenses fell 17 per cent from £5.3m to £4.4m.

In March the Lighthouse Group accounts showed it made a £1.6m loss, an improvement on the £4.6m loss the previous year. 

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Comments

There are 3 comments at the moment, we would love to hear your opinion too.

  1. Joseph Egerton 12th May 2014 at 4:01 pm

    “Other provisions” – £841,000. Complaints provision nearly doubled. Clawback up. I assume that you selected the picture of a smiling, cheerful chief executive.

  2. Julian Stevens 12th May 2014 at 4:38 pm

    Not exactly a great advert for recruiting new members.

  3. Joseph Egerton 12th May 2014 at 4:50 pm

    I am slightly surprised that the FCA has not taken some action. Or is the unexplained provision of £841K to cover an ongoing S166 investigation?

    Surely the regulator should be very concerned at data that suggests a significant failure to train and monitor ARs. What were they pushing that has given rise to a near doubling of provisions for compensation? Why were they allowed to do this? Were they given poor or inadequate training? Was the compliance department adequately staffed? Was the remuneration policy for the firm aligned with the paramount need in any network for the vigorous protection of customer interests or was it, as these worrying numbers strongly imply, aligned with volumes of sales, regardless of compliance? Was the right person in the CF10 role – a man or woman of integrity and courage, willing to tell the chief executive “If you continue to disregard the FSA rules and Customer Interests, I will resign – and my last letter will be to the FSA telling it why”? Or was the CF10 usually to be found imitating an aged Labrador, flat on its back while master tickles its tummy? These are the questions that the FCA needs to ask – and it can get answers simply by appointing an adequately ferocious S166 investigator. Please let us have a real step change in regulation – one in which larger firms are properly supervised.

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