A boardroom reshuffle and retention payments following its decision to abort the sale of Saunderson House cost IFG Group £3.2 million in the first half of the year.
Legacy issues at the firm’s Sipp business James Hay and legal costs relating to the sale of its international business also pushed up the company’s exceptional costs.
Assets under administration and advice rose by 8% to £31.3 billion year-on-year, with the group’s operating profit of £1.4 million comparing to a loss of £0.1 million in the first six months of 2017. Revenue increased by 12% to £43 million.
A tumultuous April saw IFG reverse its decision to put its discretionary arm Saunderson House up for sale and the firm replace its previous CEO John Cotter with Kathryn Purves, who had been a non-executive director and chair of its risk committee. The incumbent chairman John Gallagher also stepped down and was succeeded by Mark Dearsley.
In a stock market update, Purves said both Saunderson House and James Hay are the subject of strategic reviews.
‘We are working to ensure that group's role is clearly defined and efficiently delivered. In doing so, we have identified potential savings of around £1.0 million from fully implementing the move to devolved group governance,’ she said.
‘This is primarily made up of a reduction in the board and executive team costs as well as a reduction in our property footprint. These savings will be substantially delivered by June 2019, with the full run rate benefit visible in H2 2019. We estimate that this cost saving will result in restructuring costs of up to £1.0 million.’
Meanwhile, Saunderson House saw net inflows of £0.6 billion in the first six months of the year, down from £0.9 billion over the same period last year. Market movements added a further £0.1 billion, nudging the division’s assets under management up to £5.1 billion. Total group AUM rose from £30.6 billion to £31.3 billion.
Revenue at Saunderson House rose from £16.2 million to £17.1 million, with an operating profit of £3.4 million, down from £3.9 million year-on-year.