Lighthouse posts £232k loss as adviser numbers fall 18%

Lighthouse Group posted a £232,000 pre-tax loss in the first six months of the year as adviser numbers dipped 18 per cent year-on-year following the introduction of the RDR.

The loss in the first half of the year follows a £59,000 pre-tax profit in the first six months of 2012.

Revenues were down 14 per cent year-on-year, from £27.1m in the first six months of the 2012 to £23.4m in the first six months of this year, mainly as a result of the drop in adviser numbers, the firm said in its interim results today.

Adviser numbers fell from 608 at the end of June 2012 to roughly 500 at the end of June this year. This followed a 15 per cent reduction in advisers the year before.

While there was a significant drop in adviser numbers, however, the average revenue per adviser rose 3 per cent to £80,000 a year.

The group’s net cash balances, after the deduction of £820,000 in unsecured loan notes raised in March, stood at £8.3m at 30 June 2013, a reduction of £2.2m from the 2012 year end position of £10.5m.

The group has made no further provision for any potential liabilities arising from Arch Cru or other advice issues.

The board says it proposes no dividend in the current year.

Lighthouse Group chairman Richard Last says: “The board is pleased with the progress that the group has made during the period.  This strong result has been driven by the group’s focus on increasing revenue per adviser, higher levels of engagement between advisers and clients and an ongoing focus on building relationships with affinity groups through the LFA division.  All of this has been achieved despite the unprecedented changes that the industry has faced in recent months. 

“Lighthouse is in a robust position in the market with a strong balance sheet and a good operating position post-RDR, and the board is confident that the outlook for the group in the short and longer term remains positive.”  

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  • Julian Stevens 25th September 2013 at 7:27 pm

    The reason so many intermediaries are leaving networks is because the FSA has embarked on yet another of its hatchets and sledgehammer drives to enforce compliance with its RDR, to the point at which, as a member of a network, it’s become almost impossible to tick all the compliance boxes on anything we try to do.

    So members are saying To hell with this, I’m leaving and when you have only half a dozen members left you’ll have ceased to be a commercially viable operation. Is this what the FSA wants? Increasing numbers of intermediaries are strongly of the opinion that it is, and that there’s more than a grain of intent behind Martin Wheatley’s statement that those who can no longer afford advice will just have to go online and, at their own risk, try to sort out their affairs for themselves. All the evidence is there.

  • Joseph Egerton 25th September 2013 at 10:53 am

    A loss of £232K compared to a £50K profit in the previous year. An ongoing annualo drop in adviser numbers of 15%. A reduction in cash of over 20%.

    Not since Neville Chamberlain attempted to escape the consequences the Norwegian debacle of 1940 – a humiliating defeat for the world’s greatest naval power – have we seen such an absurdity as the chairman of Lighthouse describing financial disaster as ‘progress’.

    Little wonder that Malcolm Streatfield, Lighthouse’s chief executive, tried to take the firm off AIM. The shareholders would do well to deliver to him the message that Leo Amery gave Chamberlain when he quoted Cromwell: ”You have stayed here too long..in the name of God, go’.

  • James James 25th September 2013 at 10:52 am

    18% reduction advisers but an increase of 3% per adviser. Is this after they’ve paid their increased costs etc or just an actual 3% increase in revenue before all this stuff is taken off which would mean every one of their advisers is worse off? Just watch how many leave this industry or desert the networks at the end of this year.