In an update to the market on Tuesday, Easton Investments, owner of GPS Wealth, Merit Wealth and The SMSF Expert, reported an increase in year-on-year profits of 98 per cent to $3.51 million in the five months to 30 November, up from $1.77 million in the prior corresponding period.
“Both of the company’s operating divisions, Accounting Solutions and Wealth Solutions, have reported strong revenue and earnings growth over the period, while corporate costs have remained flat,” the company said.
The group’s Wealth Solutions division had seen a 55 per cent rise in profits from $850,000 in the five months to November 2019, to $1.31 million in the five months to 30 November this year.
Easton said it had introduced a new pricing model for its advisers over the period and seen continued growth in its managed account business.
However, the group flagged its transaction with HUB24, which involved the acquisition of advice licensee Paragem at the same time as the platform provider would take a 40 per cent stake in the broader Easton business, would likely see “material” costs added to its statutory profits for the first half of the 2021 year.
“These costs are likely to be material but tare not expected to impact underlying profit as they are considered to be normalisation adjustments given that they are one-off, non-operational items,” Easton said.
“The company’s full-year earnings will of course be dependent upon numerous factors including any future COVID-19 impacts and movements in financial markets, and accordingly are subject to fundamental uncertainty.”
The company said it expected “to be in a position over the coming days” to provide an update on the proposed transaction with HUB24.
Price gouge whilst you still have advisers. In five years there will be none left and the licensees will be blaming everyone else, just like the life insurance companies currently are.
The notion that advice and product could be separate was a nice dream for a couple of months.