The advice arm of Merchant House Group has reported a loss despite rise in revenues due to a high administration costs and the cost of acquisition.
FTAdviser added that the revenue of the advisory firm grew by 22% in the six months to 30 June 2012, with sales reaching GBP2.7 million, compared to GBP2.2 million in the previous year.
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Meanwhile, the company is continuing its efforts to cut costs, which includes dropping low profit advisers.
The company cited administrative expenses of more than GBP2.1 million, coupled with just over half a million pounds spent on acquisition of IFA members and clawbacks, as the reasons that led the company to incur a loss before tax of almost GBP1.5 million.
On 1 October 2012, Merchant House Group reported a loss of GBP5.6 million for the whole of 2011, including a loss of GBP2.4 million incurred by Merchant House Financial Services, which it attributed mainly to the process of re-authorizing the advisors in a newly-acquired firm.
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