Centrepoint announced a statutory net loss after tax of $7.8 million – still a significantly improved result from the $17.9 million loss recorded in the 2012 financial year.
In his chairman’s report, group chair Rick Nelson noted that result included claims provisioning costs of $10 million arising from claims against PIS advisers for advice prior to July 2010.
The group saw strong growth in new clients for Centrepoint Alliance Premium Funding (IPF), Associated Advisory Practice (AAP) and Wealth Products (white labelled platforms and funds management products).
Centrepoint said each group grew market share and underlying profitability during the year.
IPF, the insurance premium funding business, grew 16 per cent during the year, with pre-tax profits up 42 per cent and volumes up 20 per cent at the start of the new period compared to the prior period.
Licensee support business AAP grew its Australian financial services licensee clients 12 per cent during the year to 191, and has since moved past 200, Centrepoint stated. While still profitable, regulatory and scheme transaction costs reduced profits from $3.1 million in 2012 to $2.7 million.
In the wealth products business, Ventura and All Star funds management and Investment Diversity platforms grew revenues by 16 per cent and pre-tax profits by 32 per cent during the year to $2.5 million. Centrepoint said the platforms are benefiting from an increase in the number of advisers from external groups using the platforms.
Centrepoint said the PIS advice business “continues to invest in systems and processes to meet the new regulatory requirements along with building a platform from which to deliver enhanced service to its advisers and customers”.
The group said the reduction in adviser numbers over the past three years has now stopped and the group is building a platform for growth. PIS’ adviser practices decreased from 701 to 533 in the financial year but the group said it remains the largest non-institutionally owned licensee in Australia.
PIS was “adversely impacted by the results of unsatisfactory compliance processes that existed prior to 2010, which resulted in [the Australian Securities and Investments Commission] imposing an enforceable undertaking on the company in 2010,” Centrepoint stated.
The company has paid “a significant number” of claims to clients of PIS advisers in relation to advice provided between 2004 and 2010, Centrepoint stated.
PIS net revenues fell 28 per cent from $33.9 million to $24.3 million, primarily due to reduced adviser numbers. The pre-tax loss for the business unit for the year was reduced from $15.3 million to $11.2 million, including the $10 million provisioning for client claims (down from $16.7 million in the prior year).
