The UK’s sixth largest platform posted an operating profit of £4.2m ($5.5m, €4.9m) in the first half of the year – up 11% from £3.8m the same period last year, according to results published on Thursday.
James Hay saw its assets under administration rise to £20.3bn, compared to £17.5bn in the same period last year. Its total number of self-invested personal pension schemes (Sipps) increased by 14% year-on-year to 51,875, with new Sipps soaring by a chunky 46% compared to the previous year.
IFG also owns UK IFA Saunderson House, which reported a boost in operating profit in the first six months of the year to £3.6m – compared to £2.7m in the same period last year.
However, despite the boost IFG’s chief executive Paul McNamara, warned that the BoE’s decision to slash interest rates to 0.25% following the EU referendum would have a £1.2m impact on James Hay’s revenue in the second half of the year.
“Market conditions are more challenging, impacted by the possible consequences of Brexit, political uncertainty, lower interest rates and stock market volatility. We are cautious that the short-term trajectory for growth and profitability has therefore moderated, notably in the platform business,” said McNamara.
As a result, IFG warned this could lead to changes to James Hay’s pricing model, leading to an increase in fees.
“In James Hay, the macro environment, including turbulent markets, Brexit, and continued uncertainty over possible changes affecting pensions in the UK budget, led to an overall softening in the market.
“We continue to look at our pricing models, which may need to adapt to these circumstances as we continue to invest in the product and service proposition we offer to clients,” the firm said.