Johnson Fry, the financial services and property management firm, said it was expecting a sharp drop in profits in the first six months of this year, well below the pounds 2.3m achieved in the first half of 1994.
Towry Law, an independent financial advice company, said its unaudited accounts for the year to June showed a pre-tax loss of pounds 350,000, despite a trading profit of pounds 800,000 in the second half. The company lost more than pounds 1.1m in the first half.
Alan Wesley, chief executive at Towry Law, said: "Normally, we expect to break even or make a small profit in the first six months. But in the first half we suffered from a cocktail of bad news. The industry as a whole has gone through some serious turmoil, particularly over the pension transfer issue.
"There was also the lacklustre performance of the stock market last year. This was coupled to the general feeling of insecurity over employment and housing which has made many people wary of investing."
Towry Law has embarked on a round of cost-cutting, reducing running costs by 20 per cent to pounds 8.6m. The company has also cut staff from a high of 460 in 1993-94 to about 360.
Johnson Fry, which specialises in launching a wide range of financial products, including Business Enterprise Schemes, has had a tougher six months than the same period last year.
The company said: "All areas of our business have traded in line with expectations during the second quarter of this year. Several new business initiatives had been launched during the quarter and the response to these has been encouraging."
Half-year profits had been expected to fall compared with the same period last year. Then results were boosted by management fees for a large BES residential property portfolio.
Paul Gildersleeves, Johnson Fry's finance director, said: "The company has been replacing income from BES schemes with other sources of income. We do have a number of financial products that are going well.
"In particular, sales of two personal equity plans, the Hy5 and Hy1 PEPs, have attracted more than pounds 1m a week. The combined funds now have about pounds 64m under management. We are also moving into management of social housing and aim to be one of the largest housing managers in the country."
Towry Law shares were down 5 to 53p yesterday. Johnson Fry's were unchanged at 95p.