National financial services group RSM Tenon has blamed the onset of the retail distribution review (RDR) for a slump in business within its financial advice division, in its interim management statement.
RSM Tenon, which houses accountancy and financial advice arms, said that the impact of the RDR on its advice offering was uncertain and that the division’s performance had fallen below expected levels.
‘Pending its introduction, there has been a slow-down in new business activity in the service line, which has traded below our expectations,’ it said. ‘We continue to take action to ensure that the cost base of Financial Management is appropriate for its levels of activity.’
But it added that the Financial Services Authority’s (FSA) heightened supervision of the business, following its £700,000 fine in 2010 for flaws in its sale of structured products, had now stopped.
‘Financial Management has made major progress over the last year following its period of heightened supervision with the FSA and has now moved to a business as usual monitoring relationship with the regulator, which will allow the service line greater time and focus to concentrate on its commercial trading,’ it said.
RSM Tenon’s reporting of its interim results for the period from 1 July to 19 November follows a disastrous set of results for the group for the year to the end of June, which saw it report a £101.8 million loss before tax.
RSM Tenon chief executive Chris Merry (pictured) said the group was making progress in returning to profitability. ‘I am grateful to our clients and staff for their continued support as we build on the changes we have made,’ he added.