Investors Capital posted annual net income of $0.32 million for the fiscal year ended March 31, 2010, vs. a net loss of $1.83 million a year earlier. Adjusted earnings were $1.48 million compared to a negative $0.26 million in the prior fiscal year.
The turnaround, achieved despite a market-driven 3.0% decline in overall revenue, was aided by a 6.4% increase in advisory revenue and a 21.4% decrease in operating expenses, according to a press release.
The jump in advisory revenues reflects the fact that assets under management have risen through March 31, surpassing the $1 billion level, according to the company.
“We see net capital violations and firms growing too fast by sacrificing quality for quantity,” said Timothy B. Murphy, president and CEO of Investors Capital Holdings, said in a statement. “Our strategy of controlled growth, prudent management of expenses, and long-term vision to maximize operational efficiency has enabled us to thrive during the recent market disruption.”
Recent cost-cutting measures include a 40.3% decline in advertising and other communications expenses, a 39.2% decrease in regulatory, legal and professional expenses, and a 12.3% drop in compensation and benefits.
As a result of these cuts, the company says, it posted operating income of $860,000 in the fiscal 2010 vs. an operating loss of $2.17 million in fiscal 2009.
Investors Capital “continues to benefit from improving overall quality of its registered representatives, a key component of its strategy for achieving growth in revenues and net income,” it said in a statement.
Some 550 independent advisors as affiliated with its broker-dealer, and an average of roughly $1.8 million in assets under management (or AUM) per rep.