Insignia reports a $185 million statutory net loss after tax in FY24, but sees improved performance in its newly restructured advice division.
The firm reported a statutory net loss after tax of $185 million, but an underlying net profit after tax of $217 million. During the previous financial year, it reported a statutory net profit after tax of $51.2 million.
The loss was attributed to increased remediation costs and costs related to the transformation and separation of the business. During the year, some $70 million in cash payments were made to advice clients and $75 million was paid to product remediation clients, as well as increases in provisions for both remediation programs.
The firm previously flagged in its first-half results in February that its second half was unlikely to be as strong.
Average funds under management were up from $292 billion a year ago to $301 billion.
During the financial year, the firm embarked on the restructure of its advice division into Rhombus Advisory.
Net revenue in advice was $205.7 million, up from $204.6 million a year ago, as a result of strong client growth across advice, higher asset-based income fee income in Shadforth, and a focus on higher value clients.
It reported a net loss after tax in advice of $4.1 million, compared to a loss of $33.9 million a year ago.
The number of advisers dropped from 1,413 to 1,086 and the number of practices from 461 to 322 which the firm said related to the divestment of Millennium3, exit of Godfrey Pembroke, closure of the Lonsdale licence, and rightsizing of the Bridges adviser numbers.
“The successful restructure of advice from loss making to EBITDA positive, enhanced by the separation of Rhombus Advisory, creating an innovative partnership for self-employed advisers and enhancing our focus on our wholly owned and operated advice businesses, Bridges and Shadforth,” the report stated.
The firm opted not to pay a dividend for FY24 and said this was done “in order to enhance balance sheet flexibility, accelerate cost reduction and strategic growth opportunities, and finalise remediation”.
Scott Hartley, chief executive of Insignia, said: “As an organisation we have delivered on our FY24 priorities, which have further simplified our business and reduced costs. We remain on-track and committed to delivering our FY24–26 commitments and, in addition, accelerating our cost optimisation program and reviewing our Master Trust end state operating model.
“Over the last 12 months we have successfully migrated MLC Wrap to Expand, restructured our Advice business, and divested non-core assets demonstrating our strong track record of execution. We continue to simplify our business and the recently announced new operating structure will drive enhanced accountability and improve efficiency.
“Insignia Financial’s strong, scaleable positions across the wealth management value chain create the opportunity to deliver long-term sustainable growth for our shareholders and improved outcomes for customers.”
