Strong revenue growth in the wealth division saw Yellow Brick Road (YBR) record its maiden profit for the six months to December 2016, with a net profit after tax (NPAT) of $400,000.
This was a $4.5 million improvement on the first half of the 2016 financial year, which saw a loss of $4.1 million.
The firm’s wealth business recorded revenue growth of 25 per cent, including a 29 per cent improvement in recurring revenues. Recurring revenue growth stemmed from a 28 per cent increase in underlying funds under management (FUM) and a 20 per cent increase in premiums under management (PUM) since 30 June 2016.
The firm saw a 26 per cent increase in life insurance completion volumes.
In an announcement to the Australian Securities Exchange (ASX), the firm said a streamlined product range enabled it to direct training resources across fewer products to support branch and adviser performance, while advisers were better informed across fewer products.
“Over the last six months YBR’s Wealth CRM [customer relationship management] completed its pilot phase,” the firm said.
“When full implementation is achieved, in H2 FY2017 branches will be empowered to develop their own statements of advice (SOA) without the need for head office support or the cost and delays of external para planning.
“Along with smart technology development and deployment, this initiative will reduce costs, improve processing time and improve the overall customer experience for simple wealth SOAs.”
The company’s underlying earnings before interest, tax, depreciation and amortisation (EBITDA) excluding non-operating costs was $3.1 million, a $5.1 million improvement on H1 FY2016.
The firm appointed Westpac’s Adam Youkhana as general manager of its wealth division in September last year after Matt Lawler resigned in July.
Lawler moved to OneVue in November.