Insignia reports $49m NPAT loss

22 February 2024
| By Laura Dew |
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Insignia Financial has reported a net profit after tax (NPAT) loss of $49 million in the first half of FY24 driven by strategic transformation costs and remediation payments.

Announcing its results for the six months to 31 December, the firm said the NPAT compared to a profit of $45 million in the prior corresponding period. 

This was partly due to $72.6 million raised during the period for remediation provisions, and structured provisions for remediation were $132.7 million.  

It concluded remediation of ex-ANZ fees for no service, and expects quality of advice and structured historical product remediation to be completed by 30 June 2024.

Underlying NPAT was $95.5 million, up 1.2 per cent. 

Net revenue increased 0.6 per cent on the prior corresponding to $695.7 million, driven by higher average funds under management and administration (FUMA) from positive investment markets but offset by product and platform simplification repricing.

FUMA was $300.6 billion, an increase of $15.5 billion during the period thanks to strong investment markets.

Renato Mota, chief executive of Insignia, said: “The current period of profit result reflects significant investment in future growth and our desire to complete the remediation programs. 

“It’s pleasing to see strong early progress against our FY2426 strategic initiatives as we strengthen our foundation for growth and deliver the benefits of scale to our members, clients and shareholders.”

Net revenue in its advice division increased 3.8 per cent from $103.7 million to $107.6 million, thanks to higher ongoing client fees from the repricing program in Shadforth Financial Services, fee uplift at Bridges and cessation of third-party income. 

Adviser numbers of 1,199 saw a decline of 21.4 per cent due to the Millennium3 sale, closure of the Lonsdale licence and right sizing of the Bridges business.

In February 2024, it executed a sale agreement with Practice Development Group to return ownership of Godfrey Pembroke to advisers under an existing arrangement from when Insignia acquired the business. 

Its plan to develop the Expand platform suite ahead of the migration of MLC Wrap to Expand is on track to be completed in April 2024, which will result in over $83 billion on the platform. 

The establishment of new advice model Rhombus Advisory is also on track for profitability and separation in the first quarter of FY25, the firm said.

 

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