Monday 16 September 2019

Sale uncertainty may cause existing clients to defer making new investments – IFG Group

Kathryn Purves, CEO of IFG
Kathryn Purves, CEO of IFG
Ellie Donnelly

Ellie Donnelly

Dublin-based financial services firm IFG has said its failure to conclude a deal to sell its financial planning and investment management arm, Saunderson House, has not had a material effect on new client wins to date, though some existing clients deferred making new investments.

Ahead of its AGM today, the company said that it may see some knock-on impact in the coming months, as the creation of new client pipeline is likely to have been affected to some extent. However, the company said that clarity brought about by the decision not to proceed with the sales process will remove uncertainty for both new and existing clients.

Overall, the Saunderson House business achieved 77 new client wins across both advisory and discretionary management services in the three months to 31 March, and now serves 2,214 clients, up 9.8pc from March 2017.

Assets under advice at Saunderson House at 31 March 2018 were £5.1bn - up 8pc on 31 March 2017.

This figure is in line with 31 December 2017 with net inflows during the quarter offset by adverse market movements, the company said.

Meanwhile new client wins of 1,400 at the group’s James Hay arm were down 10.8pc on the prior quarter and 14.2pc lower than the first quarter in 2017.

"We believe this reflects the performance of the wider platform market, driven by a slowdown in the DB transfer market, equity market volatility, and adviser focus on factors such as GDPR and MiFID," IFG said.

Assets under administration under the James Hay arm at 31 March 2018 were £25.4bn - up 9.1pc from 31 March 2017.

This figure is slightly below 31 December 2017 (£25.5bn) with net inflows during the quarter offset by adverse market movements.

Whilst there has been a modest fall in cash balances held on the platform, the repricing, together with the increase in the Bank of England Base Rate announced in November 2017, delivered “significantly” improved revenues and profits in the first quarter compared to the same period in 2017, IFG said.

Commenting on her recent appointment as chief executive, Kathryn Purves said she was "delighted" to have joined the executive team.

"The group owns two businesses which continue to perform well and we have a clear focus on addressing the legacy issues within the business and delivering value to shareholders,” Ms Purves said.

"We are reviewing how best to deliver this and I look forward to updating the market in due course."

Overall the group said that its profitability in the first three months of 2018 is "materially ahead" on the same period last year.

IFG said that its underlying businesses have had a "positive" first quarter and were well positioned for long-term growth.

Headquartered and listed in Ireland, IFG’s main business operations are in the UK. It is valued at around €190m.

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