Vestra out of the red with landmark £2m profit

Vestra Wealth moved into the black for the first time after posting a £2 million profit, buoyed by asset growth from IFA relationships.

The wealth boutique’s £2 million profit over the 12 months to the end of April follows a £319,000 loss the previous year, and represents its first profit since its formation in 2007 by a group of former UBS bankers, which saw it become embroiled in a bitter legal dispute with the Swiss investment bank. 

The group was hit with an injuction in the summer 2008 which prevented it from poaching additional staff and clients from UBS, which was subsequently lifted in January 2009.   

Vestra founder and managing partner David Scott (pictured) said: ‘A lot of people tried to write us off at the start, but the continuing growth in assets under management show that people believe in the message of what we set out to do.’

Turnover increased by £5.6 million to £16 million over the period, while partners invested £2.2 million back into the business.

‘We don’t want to go on an acquisition spree just for the sake of it. But we are lucky to have long-term investors, and if we saw a good opportunity today, we would raise more capital,’ Scott added.

Over the year to December, the firm posted a £500 million asset rise to £2.5 billion, which he attributes to its relationships with a ‘core’ of independent financial advisers and to having a transparent approach.

Scott said Vestra was well prepared for the industry reforms in the retail distribution review, which amongst other things aims to crack-down on product bias by restricting commission received by IFAs.

‘We have nothing to fear from RDR. We would always rebate any trail commission to clients and have campaigned against product bias since we started up. Not wanting to be complacent, but in a way the market is going into our favour by starting to tackle the lack of transparency that existed,' he said.

The firm plans to grow its offshore business in 2012, following the opening of a dedicated Jersey office for Heather Tibbo and Paul Pollard at the end of last year.

‘Since our St Helier office opened up, we have been much better positioned to deal with international clients. We wanted to make sure we had built our offshore sector before going out and getting the clients,’ he said.