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Pulled advice business sale drags on James Hay parent profits

The new management team at IFG Group will look to make efficiencies across both its platform and IFA business after a year of mixed results.

IFG’s IFA business Saunderson House recorded a 7 per cent drop in new client recruits to 134.

Its accounts this morning also show it paid staff retention payments of £1.5m and £100,000 in legal costs after an unsuccessful attempt to sell the business.

IFG said in April that despite multiple offers for the business, a sale would open it up to risks that could create lower value for shareholders.

Speaking to Money Marketing, new IFG chief executive Kathryn Purves says the group will focus on a restructure that allows Saunderson House and platform arm James Hay to function more independently.

She says: “As a new management team, we are looking at how we build value for shareholders going forwards and making sure both businesses are self-reliant.

“The first few months of the year were challenging but despite this, we have some good results.”

Saunderson House director Tony Overy says the IFA will continue to overhaul its systems as it looks to recover from the first six months of the year.

The formerly UK-focused business will be expanded to new markets next year.

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Overy says: “We’ve been investing in back offices systems including our portfolio management systems which enables us to do automatic rebalancing on portfolios and automatic trading, which we hope will increase client service, especially around the discretionary portfolio service and we plan to run that out to our advisory business.

“Clients will hopefully see an improved service then we can service more people more effectively.”

While overall revenue for IFG increased 16 per cent to £25.9m with operating profit coming in at £3.4m, James Hay saw a 20 per cent drop in Sipp clients to 2,469.

Chief executive Alastair Conway says increasing pressure and scrutiny on the defined benefit transfer market is still impacting progress.

Purves says £1.3m is still set aside to address ongoing problems regarding the taxation of investments made through James Hay into biofuels investment scheme Elysian.

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She says: “We are continuing to work through but there is no change in position, we continue to work through a formal appeal process with HMRC.”

Purves also confirms there are no long-term plans to put Saunderson House back on the market.

She says: “We have two really good businesses in attractive, growing markets with significant growth potential that are currently undervalued. We remain focused on the team and on driving value for shareholders and we are taking what we view as the appropriate steps now to deliver that value. That’s about supporting both businesses and having a solid group structure.”

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