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Personal Touch sheds fifth of ARs ahead of MMR

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  • 17/09/2013
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Personal Touch sheds fifth of ARs ahead of MMR
Personal Touch has lost a fifth of its appointed representatives ahead of the Mortgage Market Review while experiencing a 66% fall in pre-tax profits.

The company had 576 appointed representatives at the end of 2012, a drop of 21% on 2011 when it had 733.

The number of registered individuals also fell, dropping to 1,161 from 1,492, a fall of 22%.

During 2012 the Personal Touch directors undertook a review of the company’s strategy and fee model, which they said has resulted in a number of the network’s less profitable firms leaving.

Chief executive Max Wright said he had overseen a ‘relentless drive’ to promote quality advisers over the traditional focus on quantity ahead of the new regulatory regime.

He told Mortgage Solutions the network would soon be launching MMR road shows for advisers: “We wanted to make sure that MMR activity was focused on those who will be members at the end of this year.

“What we are not going to do is throw the trawler net over the side of the boat and drag advisers in. I want to help our members recreate good quality mortgage advice.”

The prospect of a mortgage market recovery made little difference to his strategy, he added: “I don’t want to match the size of the members to consumer demand if I cannot match that demand with quality advice.”

Personal Touch’s pre-tax profits fell to £0.4m for last year, down from £1.2m in 2011.

Annual turnover for the year grew 15.7% to £64.9m, compared to a fall the previous year of 6.3%, with turnover in 2011 at £56.1m.

However annual average productivity per adviser has risen from £38,000 in 2011 to £44,000 in 2012, which the company said is in line with its strategic plan.

The gross profit margin of the company remained at 17% during 2012.

However the increased administrative expenses due to the operational restructuring – which were £10.7m in 2012, up from £8.6m in 2011 – led to a reduction in operating profit to £370,074, down from £1.5m in 2011.

Supporting this strategic realignment, Lloyds Banking Group’s private equity arm LDC, the largest shareholder of Personal Touch’s holding company, injected a further £12.6m during the 2011/12 financial year.

Wright said: “When I came into the business I said I wanted to make sure we had the necessary funds to improve the technology and all the necessary infrastructure to operate. I wanted the confidence to know that if we wanted to do something with our resources we could do it.”

The network had been improving its systems throughout the year and would continue to do so throughout 2014, he added.

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