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Openwork loses 400 advisers and makes £8.5m loss

Openwork lost over 400 advisers in 2010 and made pre-tax losses of £8.5m.

Openwork’s 2010 accounts, published today, show the number of Openwork advisers fell 17 per cent from 2,485 in 2009 to 2,060 in 2010, while losses increased from £5.6m to £8.5m.

The firm paid out around £500,000 for complaints redress and made a provision of £2.2m during the year.

The network has blamed the drop in adviser numbers partly on the establishment of Caerus Wealth Group by former Openwork chief executive Keith Carby as well as a reduction in the number of advisers in the industry.

Carby was Openwork chief executive until July 2009 when he left due to tensions within senior management regarding the future management and ownership of the business. He launched Caerus Wealth Group in summer last year.

Openwork chief executive Mary-Anne McIntyre (pictured) says: “The decline was a reflection of both a general contraction in the number of advisers in the market and targeted competitor activity following the establishment of a rival network by ex-Openwork staff.”

Openwork’s accounts say the firm expects to continue to make a loss in 2011.

It adds Openwork’s investment platform, powered by Zurich, will be available to network advisers in early 2012.

Last month, Money Marketing revealed that Openwork has spent £15m on RDR projects over the last two years and that it is turning its national IFA arm 2Plan into a network, as well as looking to launch a national proposition in 2012.

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Comments

There are 10 comments at the moment, we would love to hear your opinion too.

  1. I know the Swiss franc is strong,but can they afford to keep this dinosaur going?

  2. The drop in the number of advisers is a lot to do with the demographics. They are all former Allied Dunbar advisers and getting old like the rest of us. No one is joining the industry, so the numbers will inevitably fall even further. Jan 1st 2013 will see the real watershed of this once massive sales force. RIP

  3. It’s strange isn’t it how sarcastic comments are always posted from the safety of anonymity.

    All networks will continue to lose advisers in the current climate and Openwork will inevitably take on advisers from other networks as well.

    The only difference is that no-one would bother to read an email headed “Openwork gains 400 advisers”.

    Bad news is more interesting I’m afraid.

  4. Dear Matthew
    I hope you are not a financial adviser!
    Would you put anymore money into this?
    Pleasantly ‘anon’

  5. Financial advisers ought to be able to read accounts… Total losses over 2 years £14.1m. RDR costs (i.e. one off and non recurring) £15m operating profit £900k. Take away your loss making tail and add a decent platform presumably offering greater margin to Openwork and the business is back in serious profit.

    Yeah I ‘d probably put money into it.

  6. Thank you Simon.

    Not to mention the set up costs for Omnis (Money Marketing Awards Best Multimanager Provider 2011)

    (I wonder if anon is a financial adviser or as I suspect a BDM or recruitment consultant for a rival network).

    As for my initial comments I rest my case!

  7. Simon
    Even after RDR they will make a profit?
    I think not!

  8. Much opinion and yet still anonymous? Are you Keith Carby??

  9. Perhaps the 400 advisers left to escape the ‘Night of the long knives’? Or perhaps it is the continued, never ending wait for Practice owners to get the monies promised.

    It is looking grim for Openwork ‘up North’.

  10. Ancient Wisdom is....a mortgage broker in N3 30th September 2011 at 10:05 am

    RDR will put alot of networks out of business.

    Get out now – before you get swallowed up. There is no way networks will survive post RDR and expect more headlines of losses and failures in the next 2-6 yrs.

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