Sesame Limited made a loss of £2.5m in 2011 and paid out £11.4m in claims, whilst setting aside £7.4m for future complaints.
The network’s loss follows a profit of £1.1m in 2010. Sesame attributes the loss to investment in new services for members ahead of the RDR.
The £7.4m complaints provision is 12 per cent down from the £8.4m set aside in 2010. The firm had 517 complaints upheld in 2011 which it says relate to advice that was given over a number of years.
The 517 complaints is 17 per cent of all complaints received which the firm says reflects the number of erroneous cases generated by claims management companies.
The number of outstanding complaints at 31 December was 287.
The network’s turnover increased 5 per cent from £162.9m in 2010 to £170.3m in 2011.
The number of investment advisers fell 12 per cent to 1,202 from 1,379. The number of mortgage and general insurance advisers rose 3 per cent from 995 to 1,020.
Its results form part of the overall Sesame Bankhall Group accounts, revealed earlier this year, which show the group made a trading profit of £2.2m in 2011, down 56 per cent compared to £5m in 2010.
Sesame Bankhall Group chief executive George Higginson says: “As part of our long-term strategy and commitment, we have been investing millions of pounds to ensure firms are in a strong position post-RDR. Our strategy is on track and is helping to put Sesame and its members in the strongest possible position going forward.”
Access Wealth Management partner Jim Clancy says: “You only have to look at what happened at Honister to see how much strain networks are under. I do worry for the future of the network model.”