Pearson Jones well placed to take advantage of recovery

WEST Yorkshire-based independent financial adviser (IFA) Pearson Jones said it was satisfied with its performance despite a drop in profits.

The Leeds-based firm, which has four Northern offices, saw pre-tax profits fall from £884,000 to £805,000 for the year during a period of unprecedented stock market volatility.

Pearson Jones said it was continuing to win new business in particular from stockbrokers and private banks.

Managing director Tim Johnson said that although profits were down slightly, many IFAs had suffered significant reductions in profitability and had seen staff numbers reduce due to turmoil in world investment markets.

He added: “The tough climate highlighted the fact that many transactional IFA businesses had a wrong, and outdated, financial model, relying on commissions from new investments to fund their own businesses.

“This approach always causes problems in a recession. We are a wealth management business not a transactional IFA, which means that our clients pay us for ongoing good-quality professional advice in good times and bad. We do not rely on commissions from new investments to pay our staff.”

Mr Johnson said that the firm’s staff strategy meant it was well placed to benefit from the recovery.

Last year Pearson Jones was named International IFA Team of The Year in the Society of Trust and Estate Practioners awards.

The firm, which has 105 staff including 43 advisers, outsources client investments to a large number of fund management groups.

A significant proportion was invested with Invesco Perpetual and M&G Investment management, which was the most successful investment house in 2009 receiving more annual investments than any other UK fund management group since records began.