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Lighthouse profits double despite trail commission hit

Streatfield-Malcolm-Lighthouse-2013
Lighthouse chief executive Malcolm Streatfield

Lighthouse Group’s pre-tax profits more than doubled to nearly £2m in 2016, despite a multi-million pound loss of income from the switch-off of trail commission.

According to its annual results published today, profits at the national advice business increased 119 per cent to £1.9m from £900,000 the previous year.

Revenues increased by just shy of 2 per cent to £48m, hit by a £2.1m drop in platform-based trail caused by the introduction of the FCA’s ‘sunset clause’.

50 per cent of revenues were generated from existing clients, compared to 48 per cent the previous year.

The firm experienced losses of £500,000 in revenues from April, when the sunset clause was introduced, to the end of June.

However, this was offset by a 6 per cent rise in the amount earned per adviser to £99,000, compared to £93,000 in 2015.

Earnings before interest, tax, depreciation and amortisation also rose by 37 per cent to £2.2m, while operating costs decreased by £900,000 to £12.3m from £13.2m the previous year, the firm reports.

Lighthouse Group chairman Richard Last says: “The group has continued to progress in 2016 and has delivered a good set of results.

“The increase in average annualised revenue per adviser and change in revenue mix towards higher margin divisions largely offset the impact of the removal of platform-based trail income arising from the ‘sunset clause’ introduced by the FCA to leave revenues and gross margin broadly unchanged.

“The above, together with an on-going focus on the group’s operational costs, resulted in a substantial increase in earnings.

The firm says Luceo Asset Management, the investment management service launched in October, will expand its range of funds with additional active funds to be launched by the end of February as well as both passive funds and other income-focused products within the year.

To date, the new asset manager within Lighthouse has £8m of invested assets.

Last says: “The continuing opportunities in the personal and corporate pension markets and entry into financial product solutions with the Luceo funds, leaves Lighthouse well positioned to deliver future growth.”

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