St James's Place's (SJP) distribution business tumbled into the red last year, which the firm said was due to the cost of hiring more advisers, and a £5.5m Financial Services Compensation Scheme (FSCS) levy.
SJP reported operating profits of £462.7m for 2013, up 26% on the previous year, during a period in which it said it added 45,000 new clients.
The key driver of the improved result was the increase in income derived from higher funds under management, the firm said.
Net inflows of funds under management were up 28% for the period to £4.3bn. Total funds under management rose 27% to £44.3bn.
However the distribution business made a loss for the year of £6.1m, compared to a 2012 profit of £5.3m.
The result reflects higher expenses in 2013 associated with the strong increase in adviser numbers, the firm said.
In its previous results, for the first half of last year, the business said it had benefited from a "dislocation" in the adviser market caused by regulatory upheaval to grow partner numbers.
There was a 10% increase in the number of advisers working under the SJP banner to 1,958, and through the firm's expanding Academy programme it expects a steady pipeline of around 50 more advisers to join in 2014.
The result was also impacted by levies to the FSCS of £5.5m, though this was less than the £6.2m levy SJP paid in 2012.
SJP chief executive David Bellamy (pictured) said there was a "reassuring consistency" about his business.
"Everything we understand about our market place tells us there is a growing need for trustworthy, personal advice," he said, adding that "whilst there was always room for improvement", client surveys had a shown a high level of satisfaction.
Bellamy confirmed SJP is "close" to completing the acquisition of an Asian adviser to access the ex-pat market.
St James's Place was previously owned by Lloyds Banking Group.
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