Close Brothers has seen its advice income drop slightly this year as new business was impacted by the coronavirus pandemic.
In its preliminary results for the year to July published today (September 22) the company reported advice income in its asset management arm had dropped by 4 per cent to £35.5m.
It comes as the Financial Conduct Authority continues its probe into the financial impact of the crisis on the advice sector.
Close Brothers said: "The reduction in income on advice and other services reflects lower initial fees from new advice business, which were impacted by Covid-19 and the resulting economic downturn, particularly during the traditionally busy tax-year end period."
Total operating income in the asset management division received a 6 per cent boost from higher investment management income.
But this was offset by a 9 per cent jump in costs to £107.7m, spent on technology, hiring high net worth portfolio managers and an increased FSCS levy.
It meant adjusted profits in the Close Brothers asset management arm dropped 6 per cent to £20.4m this year, but this paled in comparison to the 47 per cent blow to profits seen across the wider company.
Close Brothers as a group reported an adjusted profit of £144m, down from £270.5m in 2019, which it said reflected higher impairment charges in its banking division as a result of the coronavirus pandemic.
Adrian Sainsbury, chief executive at Close Brothers, said: "The impact of Covid-19 has been felt across our businesses and the outlook is still uncertain, but the fundamental strengths of Close Brothers remain unchanged.
"As a through-the-cycle provider of funding, wealth management and securities trading services to individuals and small businesses, our role remains as important as ever.
"Our resilient model and the experience and expertise of our people leave us well positioned to respond to opportunities and to continue to support our customers and clients into the future."
Mr Sainsbury took up the top role this month on a salary of £550,000 a year, replacing his predecessor Preben Prebensen who announced his resignation earlier this year after a decade in the role.
rachel.mortimer@ft.com
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