Shares in Saunderson House parent business IFG Group fell 11% following a profit warning on an restructuring of sister business James Hay, wiping out recent private client gains.
The business warned that exceptional costs this year are ‘expected to increase materially’ after the board yesterday approved a plan to accelerate an ongoing restructure ‘supporting increased efficiency, reduced on-going costs and improved service levels to clients’.
In May the company revealed it was facing a £1.8 million tax charge on behalf of Sipp clients who had been invested in biofuel fund Elysian Fuels by an external financial adviser.
‘James Hay did not advise investors in relation to these investments; it acted solely as pension administrator,’ it noted at the time.
‘James Hay has received, in April 2017, assessment notices for sanction charges from HMRC for the tax years 2011/2012 and 2012/2013 in total for £1.8 million. These have been appealed and are the subject of ongoing discussions with HMRC.’
The warning overshadowed the ‘faster than anticipated growth’ in the company’s recently launched discretionary division, which added 144 clients in the first half, versus 126 in the same period of 2016.
Total client assets across James Hay and Saunderson house rose from £24.4 billion to £29 billion over the last year.