Wrap Transact suffered a £3m drop in profits last year after it was hit by an FSA fine for client money breaches.
The wrap reported profits before tax of £14.6m for the year ending 30 September 2011, compared to £17.6m for the same period the previous year.
The fall in profits comes after Transact was hit with a £3.5m FSA fine in December for client money breaches.
Head of marketing Malcolm Murray (pictured) said the results were also affected by a decision in 2010 to reduce its annual charge to 0.55% from 0.6%.
He said the wrap is "pleased" with the underlying growth of the business when considered against the FSA fine and reduction in annual charge.
Funds under management in the period increased £1bn to £10.1bn in 2011. Transact said the number of advisers using the wrap also increased, from 4,500 to 5,000 during the year.
To aid regulatory reporting
Three year strategic review
Impact on markets
Has run Cautious Managed fund since 2011
What’s right – not what sells