In an ASX announcement on Thursday morning, E&P Financial Group announced that its funds under advice (FUA) grew to $29.4 billion at the end of the 2023–24 financial year.
This represented a 26 per cent increase from $23.4 billion in FY22–23, which the firm attributed to an “uplift in family investment office client balances and growth in the value of existing client portfolios driven by increased share of wallet and solid investment performance”.
However, the group also reported a statutory loss after tax of $27.7 million, which it said was “heavily impacted by a non-cash goodwill impairment of $19.3 million in E&P Capital recognised in 1H24”.
E&P also noted that the “quality” of its wealth division’s FUA had improved, with more of its clients either joining or transferring to an FUA-based fee service.
“At 30 June 2024, 69 per cent of all client FUA was serviced under a FUA-based fee arrangement, up from 62 per cent at 30 June 2023 and 41 per cent at June 2020. These numbers are a reflection of the success of previous initiatives to transition the broader service offering to a contemporary FUA-based model,” E&P said.
“Overall, total client numbers of approximately 7,400 as at 30 June 2024 were broadly stable compared to 30 June 2023, as full-service client growth led by Retail Wealth Management (RWM) was offset by a reduced number of clients on a fixed-fee arrangement.”
In April, the Federal Court of Australia approved the settlement of the class action filed by Shine Lawyers in December 2021 against Dixon Advisory & Superannuation Services (DASS), E&P, Alan Dixon and Christopher Brown for $16 million.
E&P managing director and chief executive, Ben Keeble, said this was an “important milestone”.
“Financial year 2024 was a transitional year, marked by several key developments as we resolved our outstanding legacy issues, reset our strategy for the future and solidified our core business. However, challenging market conditions impacted the level of activity in our transactional businesses as mentioned in our first half result,” Keeble said.
“The group reached a settlement of the Representative Proceeding against EP1, DASS and former directors, which was approved in the Federal Court, representing an important milestone in the resolution of legacy issues. Additionally, the transformation of the E&P funds division was completed during the period.”
The group’s wealth division also delivered an 8 per cent growth in revenue compared with FY22–23, with E&P noting that the higher proportion of FUA-based fees “should provide strong momentum for future periods”.
According to the ASX announcement, E&P Funds completed the “rationalisation of real asset strategies during the period”, which included the responsible entity internalisation of the US Masters Residential Property Fund (URF) – the fund at the heart of the Dixon collapse.
Looking ahead, E&P said it would look to accelerate revenue growth across each of E&P Wealth, E&P Capital and E&P Funds, as well as enhancing its “product offering for key segments and ensuring optimal client experience across the business”.
“With legacy issues resolved and business rationalisation complete, the active focus for the group is on returning EP1 to long-term profit growth and restoring value for shareholders. This includes the consideration of formally applying to the ASX to delist the company,” E&P said.
“The start of FY25 has been promising, with July trading consistent with the improved performance in the second half of FY24. The implementation of strategic initiatives aimed at driving revenue growth and enhancing operating margins continues to progress as planned.”
E&P claim they exist to help clients prosper, and their values are Client First, Integrity, Respect and Inclusion. Then they have the nerve to say that business growth is coming from an increase share of the client wallet. Their behaviour is appalling
Would be interesting to read the file note for each client covering the discussion and SoA recommendation to transfer from Dixon’s to E&P. There has to be some level of incriminating evidence contained therein.
Hey Advisers, how does it feel to have your collective noses rubbed into the stinking proverbial by E & P, ASIC & Treasury? They are laughing at you.
Federal Election is when?
Great business model.
Pay peanuts for a business that is going to be on the hooks for millions.
Write to the clients and tell them they are transferring to a new adviser in a different organisation (that they still own, but it has a different ABN).
Put the original business into liquidation, knowing that any claims against it will be paid for other business owners.
Easy peasy, but you make me queazy!
Advisers will be covering the cost of the Dixon Advisory collapse for years to come.
Why?
Refuse to pay and mount a class action against anyone the lawyers can think of including!
Licencees and Advisers on a nationwide basis should categorically refuse and reject any payment of the CSLR until the Govt agree to fund every current and future cost of all Dixon and E&P claims.
This is absolutely unacceptable on every moral level imaginable.
This must be a total and coordinated protest and must be stringently and strictly adhered to.
The time for negotiation, discussion or compromise is over.
This is clear discrimination and persecution of a single group who did not contribute to these claims.
I’m sure the government would find a tenuous link to be able to invoice us for the cost of the AUKUS deal if that ever goes pear shaped
Please don’t give them any ideas. They’ll blame us for the CFMEU’s woes next.
This is why 10% of new advisors are deciding this is not for them. I’m long past caring about this industry perhaps it my age but everyone I’m talking has a general sense of over it!
I know the old saying is “If you have nothing to say then say nothing at all”. But stuff that – I am angry at the moral bankrupt stance taken by such organisations, including our new addition to the club in Sequoia.
The fact that they have and are STILL able to hide behind Corporate structures to obfuscate their responsibilities is an absolute disgrace. Furthermore It continues to highlight the CLSR is going to snowball out of control for advisers who are doing the right thing.
As advisers we need to abide by the code of Ethics, yet those in the corporate seats don’t have to do diddly squat.
But don’t mind me… I’ll just go back to working in our hot mess and reading Standard 9 “All advice you give, and all products you recommend, to a client must be offered in good faith and with competence and be neither misleading nor deceptive.”
Well done ASIC & Stephen Jones for contributing to the successful results of E&P Financial Group
Wow! Really well done! for E & P to be bragging of their ‘ turnaround’ and forward strategy for clients, whilst innocent advisers who had absolutely nothing to do with Dixons (or their clients) are left to pay for their ‘legacy’ mistakes, now and probably for years to come! Absolute disgrace! They should pay all former Dixon client claims. Shame on CSLR
Not only this, but they have also retained most of the clients…and put Dixon’s into insolvency knowing the tab would be picked up by other advisers.