Financial advice partnership True Potential Wealth Management has reported losses of £242m for 2024, from a £9m profit in 2023, according to accounts posted with Companies House this week.

The losses were driven by an exceptional cost of over £250m, the majority of which was related to its recent skilled person review.

The exceptional costs included a £95m provision to cover potential redress related to a recent skilled person review into onboarded investments. A further £148.2m impairment was made against client onboarding assets, according to the financial report.

The firm said it expects to commence a redress exercise related to the review this year.

The remainder of the exceptional costs were linked to annual suitability reviews (£4.9m).

The losses came respite a rise in revenues and assets under management for True Potential WM.

Revenues rose 18% year on year to £173m (2023: 146m). Net revenues saw a slightly more modest rise of 17% to £69m due to a 17% rise in fee expenses.

Assets under management rose to £13.5bn (2023:£12.2bn), with an additional £12.7bn serviced by its central advice team.

Adviser numbers fell 7% to 1,088 over the year (2023:1,169). The number of administrative employees employed by the firm rose 25% to 202 by the end of the year (2023: 162 employees).

True Potential WM said that the 2024 losses posted were a “point of technical accounting” and would not impact its day to day business.

In July Steve Hutton, the CEO of True Potential Wealth Management, left the business after just eight months in the role of CEO. He had been with the business for seven years and was promoted to CEO in December.

The firm is still searching for a replacement for Mr Hutton, and has appointed chief client officer Jamie Sexton as interim CEO in the meantime. 

True Potential Wealth Management is the Newcastle-headquartered financial advice arm of the True Potential Group.

The wider True Potential Group reporter a group pre-tax profit of £111m for 2024 and almost £33bn in assets under management.

True Potential has expanded rapidly in recent years as a consolidator and acquirer of financial advisory firms and has become one of the UK’s biggest financial advisory businesses as a result.