IFA posts second successive loss
The Institute of Financial Advisers (IFA) has posted a second successive annual deficit, losing $170,821 in the 12 months to June 30 this year.
Wednesday, December 5th 2007, 5:52AM
by David Chaplin
However, in the latest results the industry body's revenue has almost halved from $1.5 million in 2006 to just over $800,000 in the year to June 30, 2007.
David Hutton, IFA chief, said the drop in revenue was mainly attributable to the fact the 2007 results did not include any conference income.
"We changed the dates of the conference from June to July, which had an impact on quite a few things," Hutton said.
He would not comment on whether the 2007 result would have been in the black if conference earnings had been included.
"That's commercially sensitive information," he said.
As well as the slump in revenue from its conference and other meeting activities ($102,277 in 2007 versus $648,033 in the previous period), the IFA saw a drop of about $45,000 in member subscriptions and over $100,000 in 'other revenue' compared to its last report.
Hutton said the reduction in member subscriptions reflected a more "rigorous" assessment of charges rather than a decline in membership.
As of July this year, IFA annual membership fees increased to $550 (from $500) for ordinary members.
While revenue was down, IFA expenditure also declined in all areas except governance, which jumped from $83,991 in 2006 to $122,565 in the 12 months to end of June 2007.
Administration expenses fell from just over $560,000 to almost $518,000; conference and meeting costs dropped from $674,000 to $130,000; and, spending on 'professional activities and member support' declined from almost $330,000 to slightly above $200,000.
This year IFA director fees increased from almost $25,000 in 2006 to slightly above $40,000.
Overall, the IFA shelled out $971,808 in the 2007 period compared to $1.65 million in the previous report.
Hutton said the IFA has been doing "more for less" but the industry body had also been distracted by its preparation for impending regulation.
"We're actually taking on development costs without receiving any extra funding," he said. "All industry associations are facing this issue. If the government wants us to do this work we will need assistance."
According to Hutton, while the government has agreed in principle to subsidise industry associations who are preparing for regulation, no offer has been "formalised".
The two successive deficits have also reduced IFA member funds from a high of $522,531 at the start of the 2006 period to a new low of $206,271 in the latest report.
However, Hutton said the IFA remained well-resourced and was "trundling along fine".
At the end of June 2007, the IFA had $180,789 in the bank, compared to $211,852 at the same time last year. During the year the peak financial advisory body also divested itself of a $5,050 investment in Bonus Bonds.
The latest IFA results were only recently posted on the Companies Office website but as yet are not available on the body's own site.
Hutton said IFA members have been informed of the organisation's financial situation.
| « Advisers have 3 months to prepare for new laws | Sovereign takes regulation bull by the horns » |
Comments from our readers
No comments yet
Add your comment:
|
|
Printable version |
|
Email to a friend |
