Tenet Group has set aside £13.7m to cover potential liability arising from the British Steel Pension Scheme redress scheme.
In its financial results to 30 September 2021 published on 4 October on Companies House, the company said it has reached an agreement with its shareholders to enable it to meet estimated historic liabilities arising from the BSPS.
The group’s focus is to “ensure BSPS clients are redressed where necessary” and estimates compensation will be paid between December 2023 and February 2024.
Tenet reported profit before tax had grown to £3.5m in 2021, compared with a loss of £600,000 in 2020. It said this was driven by “strong performance” across all business lines.
Gross profit was up 20% to £23.5m, compared with £19.7m in 2020. Tenet out this down to a focus on its own-branded businesses and improving margins.
Meanwhile, the company achieved EBITDA of £4.3m – significantly up on the £800,000 reported in 2020.
However, the group said it had continued to struggle with the effects of the Covid-19 pandemic, particularly during the first half of the financial year.
Revenue reduced slightly to £157.4m, compared with £160.7m in 2020, due to “lower volumes in the network”.
In January, Money Marketing reported that adviser members have continued to leave Tenet, amid complaints about technology and system issues.
Money Marketing understands that Tenet had also released a number of firms which do not, or are not willing to, meet new standards such as the Consumer Duty, or which no longer suit its proposition.
As well as the BSPS provision, the business reported an impairment charge of £10.3m, owing to reorganisation of the business and “historical acquisition activity from around nine years ago”. This is a non-cash item.
Loss before tax after impairment and BSPS provisioning was £21.3m, compared with a loss of £4.1m in 2020.
Tenet Group chief executive Mark Scanlon said: “Despite the unprecedented challenges of the Covid-19 pandemic, particularly in the first half of the year, I am pleased to report that the proactive measures we implemented together with the dedication and hard work of our colleagues have generated a good set of underlying results in the year under review.
“Our focus in 2020/21 has been on reorganisation, continued investment in technology and establishing partnerships to better support our network members, as well as making strategic acquisitions to support our growth objectives.”
Tenet said it has continued focus on digitisation and investment in technology.
This includes significant investment in its own in-house technology – Tenet Tech – and the establishment of a technology support team to enhance member services.
These measures aim to improve efficiencies and prepare for increased regulation and future growth.
Tenet’s own advisory arm – Tenet&You – launched its first digital product in 2021 – a mortgage monitoring service.
It automatically calculates the money that employees could save by switching their mortgage provider, in partnership with Personal Group and Dashly.
Scanlon added: “We have remained mindful of external pressures, including increasing levels of regulatory oversight, and we have in place a strategic vision for the network model for AR advisers that is centred on quality, not quantity.
“This aligns with the regulator’s industry-wide push to ensure good outcomes for end-customers, which includes the new Consumer Duty standards and increasing AR regime and Principal scrutiny.
“We have raised our standards for new members as well as tightening our existing membership criteria, in addition to the introduction of new and revamped learning, development, and growth services for members, all underpinned by our ongoing investment in technology for the benefit of advisers within our network.
“Our actions ensure we continue to champion our financial advisers, who have a vital role to play in managing people’s financial peace of mind.”
On the one hand it’s good that Tenet is meetings its responsibilities, not the FSCS. On the other it shows that the network model does not work. Networks cannot exercise adequate control over their ARs. They’ve failed time and again. I sympathise with them because I know from my time at DBS how hard their job is.
I’m amazed that even small firms have ARs. I once had a guy wanting to work with me as an AR. When I told him it would be on the provision that we reviewed every piece of business and charged him accordingly, he lost interest. (Great outcome!)
The large nationals are expensive, and the networks have quality control problems. So, what’s left? Well, the FCA may hate the fact, but completely independent small and medium-sized owner-managed businesses are, I genuinely believe, the best option for most consumers. People like me accept responsibility for everything that happens in our firms. We know the buck stops with us.
The greatest endorsement of small family financial advice businesses was that given by Harry Markopolos, the American former securities industry executive who blew the whistle on Bernie Madoff. In an interview on YouTube, Mr Markopolos stated that he would only ever use a small family adviser firm. Watch both parts, and around the 20-minute mark in part 2 you’ll hear Harry Markopolos’ s advice to always use small family adviser firms. https://www.youtube.com/watch?v=cfwJ06hc0_8.
Indeed Neil
But what stands out for me from these figures is how much these networks make off the back of advisers. Seeing this one wonders why anyone would be daft enough to join a network. Heaven only knows how much they are paying for the dubious privilege.
I can’t argue with what you say and have always thought that in the last analysis networks are a force for second rate advice. I well remember how they fought against the qualification requirements of the RDR. (As well as the other provisions of that review).
And to think Harry, DB transfers need a rake of examinations, advisers being of Chartered status or above
People with a barrow load of pass certificates and bugger knowledge, targeted on sales figures ..
Makes you laugh there are even exams on Ethics …
Exams prove nothing ( I know you will disagree) other that you passed.
Knowledge and Standard must never be defined by a dusty old certificate hung up on the office wall.
DH
You rather sound as if you are anti education. Yes, I would agree that qualifications on their own are of dubious value to ‘on the ground’ advice. But on the other hand all the experience without the knowledge is even more dangerous. Thinking you know it all is no substitute. I have come across those with more than 20 years’ experience in the business, with scant qualifications. Their advice has been frightening.
The elements needed are:
Commercial experience outside financial services. (Too many are ‘lifers’ with no real concept of commerciality)
Experience within financial services – inextricably linked to the best possible level of relevant and demonstrable education – which means qualifications.
And lastly solvency and ‘skin in the game’. I have been shocked by how many are impecunious and how few have the products which they espouse to their clients.
Yes, I made the effort to take every exam on offer from when I first started in financial services (in my forties) right through to my late 60’s. You name it, I took it. ALIA(dip) FLIA(dip) AFPC, SOFA, CFPtm, Mortgage Exam, Chartered MCSI to Chartered FCSI No, I don’t enjoy exams I just thought it necessary. Nor in the course of everyday events to I flaunt these qualifications. Most of my time in this business I ran my own business, so the qualifications were purely for my own benefit (and I hope that of my clients), not to polish any CV.
Had Harry Markopolos blown the whistle to the FCA on a UK equivalent of Bernie Madoff, bugger all would have been done about it.
This is to warn all mortgage advisors and staff members who are associated with Tenet Group as financial advisors or mortgage brokers. The Tenet Group has many group companies. Whether you are associated with TenetConnect, Tenet Lime or any other group company, this is a warning message to you that this ship is sinking. Very soon the tenet is going to file bankruptcy. Their latest results show the whole financial position of the company:
You can see the full financial statement on the companies house website by clicking the following link:
TENET GROUP LIMITED filing history – Find and update company information – GOV.UK (company-information.service.gov.uk)
Please see the page 21 of the latest accounts to see the real picture of Tenet Group financial position. The ship is sinking. Run away from this before its too late. The group was in losses in last year as well but this year, their loss is extra ordinary £21 million. This kind of losses are not bearable. Shareholders will definitely refused to inject more money. And with recession on the head, their losses will grow. From the reliable sources, their losses for this year (Sep 2022) has increased even further.
If you keep continue with Tenet and Tenet ceased trading due to financial insolvency, your business will be disturbed. In other words, you will sink with this ship. So this is the time to change the network before its too late.
Have a good day.
It is impossible to work with Tenet Network. By far the worst mortgage network in the country.