Independent broker-dealer Investors Capital (ICH), which is being acquired by RCS Capital Corp. (RCAP), said Friday that its sales improved 20% from a year ago to $25 million in the quarter ending Dec. 31, but reported a loss of $286,000, or $0.04 per share, for the period. Year-ago sales were $20.8 million, and net income was $134,000, or $0.02 per share.
Its sales boost was mainly due “to top-line growth of both commissions and advisory fees organically through targeted practice management initiatives, attracting and recruiting new financial advisors, and improved financial market conditions,” the company says.
“We achieved our largest quarterly revenue result in company history, our practice management initiatives continue to have a tangible effect on increasing advisor production, recruiting is robust, and advisor retention by delivering 5-Star Service every day remains high,” said President and CEO Timothy B. Murphy, in a statement. “Though the firm posted a net loss, I am encouraged by the fact that our operating loss was largely attributed to the merger agreement between RCAP and ICH, a positive development that I believe will tremendously benefit all stakeholders involved upon completion.”
RCS Capital is led by Executive Chairman Nicholas Schorsch, a veteran real-estate investor.
Investors Capital’s average yearly revenue (fees and commissions) per advisor rose to about $207,500, an increase of 16% from about $179,400 for the prior 12 months. “The continued growth in per capita, representative-generated revenue is a direct result of attracting and recruiting new, higher-producing advisors, favorable market conditions, and the firm’s enhanced practice management program,” the company said in a press release.
For the nine months ending Dec. 31, total revenue rose 13% to $70.2 million vs. the nine months ending Dec. 31, 2012.
Commission revenue climbed 20% to $18.6 million in Q4 vs. $15.5 million in Q3. Advisory fee revenue increased 18% to nearly $5 million compared to about $4 million in the prior period.
Expenses increased by $4.8 million, or 23.3%, from Q3 “principally as a result of increases in commissions and advisory fees compensated to our registered representatives on increased sales volume, advertising and marketing costs for practice management and recruiting, and an increase in professional fees and legal and settlement costs,” the IBD says.
Regulatory, legal and professional expenses also rose “due to legal and professional costs related to the merger agreement between RCAP and ICH.”