Announcing pre-tax profits for the year to April at pounds 6.89m, up from pounds 6.53m last year, Ivory & Sime said the loss of the BAA pension fund management contract in March had accounted for pounds 600m of the pounds 1bn reduction in funds under management.
Allan Munro, a director of the company, said the BAA contract "was the sort of loss you could do without".
It came after several high-profile staff defections, which included the BAA pension fund manager, and which culminated in the departure of Colin Hook, Ivory & Sime's managing director, in February.
Funds under managementstand at pounds 3.2bn against pounds 4.2bn a year ago. Mr Munro said winning new pensions business against this background would be "very difficult".
Mr Munro yesterday denied reports Ivory & Sime had been in sales talks with ABN Amro or that it wanted to go private. Caledonia Investments, with 29 per cent of the company, in effect controls the business. Sir David Kinloch, deputy chief executive of Caledonia, is acting as caretaker chairman of Ivory & Sime.