Investors Cap Reports Profit on Growing Sales

The independent broker-dealer has about 450 advisors with $8 billion in assets under management

Investors Capital Holdings (ICH), the parent company of the Lynnfield, Mass.-based broker-dealer of the same name, said Wednesday that it had net income of $280,000 on total revenue of $20.32 million for the period ended Sept. 30. This represents a gain of $0.04 per share vs. a loss of $0.13 a year ago.

In the second fiscal quarter, revenue rose close to 1% from last year thanks to a jump in commission revenue and other fee income, the company says. Commission revenue rose 0.8% to $15.78 million, compared to $15.66 million in the year-ago period. Advisory fees, however, declined 2.5% to $3.98 million, compared to $4.08 million in the same period last year.

The company says that ongoing expense reductions and revenue growth translated into consecutive operating and net income postings for the first two quarters of the fiscal year. It has about 450 advisors and some $8 billion in assets under management.

“We continue to invest in the revenue-generating areas of our business, supplementing the success of our recruiting efforts with proven, organic growth initiatives such as practice management, advisory services, information technology, and value-added events,” said President and CEO Tim Murphy (left) in a press release.

The firm reported operating income of $430,000 compared to an operating loss of $1.39 million a year ago. Net income was $280,000 for the quarter compared to a net loss of $880,000 12 months earlier.

Investors Capital continues to benefit from enhancing the overall quality of its representatives by providing broad practice management solutions to assist its advisors in growing their practices and recruiting established, high-performing representatives,” the company said in a statement.

The average revenue per advisor, based on a rolling 12-month period, rose at the end of the second quarter to $169,373, an increase of 0.1% over $169,130 for the year-ago rolling 12-month period.

Adjusted EBITDA was roughly $563,400 compared to negative $374,800 for the quarter ended Sept. 30, 2011.

“By continually focusing on the basics of our business and being more committed than ever to providing 5-Star Service to our advisors, we look forward to turning our current earnings successes into sustainable long-term growth,” explained Murphy.

In mid-October, Investors Capital says that the Clear Sailing Investment Group decided to affiliate with its independent broker-dealer and end its affiliation with SagePoint, one of the broker-dealers that is part of the AIG-owned Advisor Group.

Clear Sailing includes advisors Daniel S. Chabott, Sr., Jennifer Chabott, Richard Darrow, Michael Ingenito, C. Robert Kelly and Terry Seely. The firm has offices in Barrington, R.I., Northfield, Mass., Glastonbury, Conn., Newington, Conn., and Grand Rapids, Mich.

"The folks at Clear Sailing met with a number of our competitors, but selected Investors Capital based on the human factor; that was very important to them," said Peter Acciavatti, senior director of business development for Investors Capital, in a statement. “They chose us because we were real people who gave them a good feeling inside whom they felt they could trust with their business. That’s the Investors Capital brand in a nutshell.”

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