RF Capital reports net loss, record AUA in Q2

Despite reporting record assets under administration (AUA), RF Capital Group Inc. recorded a net loss of $1.9 million in the second quarter — an improvement over the $7.5-million net loss reported in Q1.

On Friday, RF Capital — which, since Q1, has consolidated the results of Richardson Wealth in its earnings reports — announced it had reached a record $34 billion in AUA for the quarter ended June 30, up from $32.8 billion in the previous quarter and $28.3 billion a year earlier.

The firm reported adjusted net income in the quarter of $2.4 million, compared to $1.1 million in the previous quarter. Quarterly revenue was $79.1 million, compared to $83.7 million in Q1.

In the second quarter of 2020, RF Capital had a net loss of $2.4 million, an adjusted net loss of $2.2 million and revenue of $7.1 million.

Richardson Wealth’s revenue in the quarter was $76.3 million, compared to $80.6 million in Q1 and $61.7 million in the second quarter of 2020.

Richardson’s advisory teams had average AUA of $217 million in Q2, up 25% from the second quarter in the previous year. Average client household AUA was $1.1 million, and the number of households with assets over $1 million was up 10% from Q2 2020.

Quarterly fee income reached a record $58.9 million, breaking the previous record of $57.6 million set in Q1 and up from $48.6 million a year ago.

Richardson’s adjusted earnings before interest, taxes, depreciation and amortization was $15.1 million compared to $8.2 million in Q2 of 2020, an 85% increase. The increase was attributable to record AUA levels, the firm said.

Richardson reported that it had 157 advisory teams, compared to 165 in the second quarter of 2020.

In a release, RF Capital said it was currently engaged in recruitment discussions with advisors with a total of $10 billion in AUA, representing the firm’s “strongest recruiting pipeline ever.”

Despite the $1.9-billion loss, a statement from Kish Kapoor, president and CEO of RF Capital, was upbeat.

“We continue to break records month after month, ending Q2 with record AUA of $34 billion, record fee-based revenue, and a record recruiting pipeline,” Kapoor said in the release.

Kapoor added that RF Capital has a “bold and audacious growth strategy” to grow AUA to $100 billion and make Richardson Wealth a destination for Canada’s top advisors.

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