The On-Line Partnership has announced a 30 per cent drop in pre-tax profit, from £929,119 in 2011 to £652,503 for 2012, as complaint provisions hit £2.7m.
The firm, which owns network In-Partnership and The Whitechurch Network, saw its year-on-year complaints provision more than double from £1.28m in 2011 to £2.7m last year.
Group chairman Stanley Lovell cites RDR preparations as the primary cause of the drop in profit.
He says: “Group profits were down compared to the prior year mainly as a consequence of preparing for RDR but also reflecting the increasing costs within the sector.”
The On-Line Partnership acquired The Whitechurch Network in June 2012, adding 140 appointed representatives with 180 advisers to the firm. In total, the group represented 322 AR firms and 557 registered individuals as of 31 December 2012.
Lovell adds: “Although group profits include the profits attributable to The Whitechurch Network in the second half of the year, a lot of the benefit was soaked up in the initial integration cost, so it will be 2013 before we see the real benefit of the transaction.”