The September quarter result for financial services group HPJDVhas been dragged down by its wealth management division, with the group recording a before tax loss of $4.5 million across all its four businesses in the first three months of this financial year.
The first quarter result for HP JDV, formed as part of a joint venture between Hartley Poynton and JDV, follows the group’s previous loss of $17.182 million for the year ending June 30.
Hardest hit of the HP JDV businesses was the 200 advisor strong wealth management division, which recorded a $3.3 million loss for the September quarter.
In a company announcement Hartley Poynton wealth management head David Craig says the results were attributed to what was the quietest quarter for a number of years for the wealth management division, due to the global threat of recession and negative consumer sentiment.
While the business did see growth in its Echelon portfolio service and Meridian master trust, as well as continued recruitment of advisors, Craig says key for business growth was scale.
“The wealth management division continues to need more scale, especially during quiet trading periods. An expanded business would properly leverage the investment in a national branch network and the commitment to training,” Craig says.
“Wealth management remains committed to our strategy and will continue to seek scale from both hiring advisors and making quality acquisitions amongst financial planning practices and stockbroking businesses.”
Also recording losses for the September quarter was Hartley Poynton Investment Bank, losing $490,000, and the group’s outsourcing business, JDV Outsourcing, which lost $780,000. According to head of JDV Outsourcing Geoff Reilly, that business remains on track to become profitable in the second half of the financial year.
JDV Technology was the only business division to post a profit, achieving $70,000.
HP JDV chief executive officer Tim Moore referred to the September quarter as ‘character building’ and pointed to the recent $25.75 million capital injection from Westpac , who became an equal shareholder in HP JDV with the Royal Bank of Canada in mid September, as a key to taking the group forwards.
“Westpac subscribing $25.75 million to become an equal shareholder in HP JDV to Royal Bank of Canada leaves the company well positioned to grow its wealth management, technology and outsourcing businesses,” he says.
