Shrinking funds under administration (FUA) is expected to reduce DKN Financial Group's 2009 net profit after tax by around 15 per cent, according to DKN chief executive Phil Butterworth.
"It will come as no surprise that the results for the 2009 year will be below those of 2008," Butterworth said at the group's annual general meeting yesterday.
"We cannot grow the FUA at the same rate as we have become used to, with the market values falling as they have done."
Profits would also be subject to the accounting treatment of intangibles, Butterworth said.
DKN's profits mainly come from recurring margins on FUA in platforms and products, with contributions also through its equity stakes in financial planning firms.
DKN's net profit after tax stood at $8.67 million for the 2008 financial year, and FUA stood at $7.67 billion in the September quarter, down from $8.06 billion in the June quarter.
The November 2007 acquisition of Lonsdale Financial Group and Wrap had given DKN the scale and strength to withstand a severe buffeting from markets, Butterworth said.
Without damaging its business model, the group will focus on managing capital and costs, and retaining its current financial planning and accounting client relationships through existing and new initiatives in 2009, Butterworth said.
DKN will also establish new financial planning and accounting client relationships, he said.
The group saw 10 new firms join its financial planning network in the September quarter.
