Insignia signposts weaker H2 amid Godfrey Pembroke exit

Insignia Financial believes performance in the advice division will be less strong in the second half of the year.

In its first half results, the firm reported an NPAT loss of $49 million and a 3.8 per cent increase in revenue in its advice division from $103.7 million to $107.6 million. 

Speaking on a results webinar for shareholders, chief financial officer David Chalmers said: “It won’t be as strong in H2 as in the first half as there’s still a lot of work going through restructuring. For example, the exit of Godfrey Pembroke, and there will be losses of revenue associated with that divestment and another one-off costs, which will hit the our profit and loss in the second half. 

“The direction of travel is clear, but I wouldn’t expect actual H2 results to be as good as H1 ones.”

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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. 
Godfrey Pembroke was picked up by the firm as part of its acquisition of MLC Wealth. 

Alongside the sale of Millennium3 to WT Financial in December 2023, the two moves have helped to transform the firm’s advice segment.

Referencing the Godfrey Pembroke exit, chief executive Renato Mota said: “We have also had a good working relationship with the group. What we looked to do was work with the financial advisers and create an environment for them to prosper which has led to the divestment.”

There are other small divestments planned by Insignia, but Mota said these may not necessarily relate to the advice division. 

Looking more broadly at Insignia as a whole, the firm reported an NPAT loss of $49 million during the period although its underlying NPAT was $95.5 million. The firm is currently mid-way through a three-year transformation process, and Mota acknowledged this was one element that had led to the loss. 

“The difference between the NPAT and the underlying NPAT is relating to some one-off costs relating to the restructure as well as remediation that we put through during the half,” Mota said. 

The transformation is focused on four pillars of improving clients’ financial wellbeing, deepening partnerships with advisers and employers, simplifying the business, and building a safe and trusted business. 

This is the final presentation for Mota, who is due to step down as CEO at the end of the month and will be replaced by Scott Hartley, former chief executive of wealth management at AMP.