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Insurance sales and higher interest income powered RF Capital Group Inc. to record revenue of $90.8 million in the second quarter, up by 15% year over year, the firm announced on Thursday.

However, assets under administration (AUA) at brokerage arm Richardson Wealth Ltd. fell to $33.9 billion, down by $3.2 billion or 8.7% from the previous quarter due to market volatility.

The results “highlight the benefit of increasing revenue diversification,” said Kish Kapoor, president and CEO of RF Capital, during a conference call on Friday. That diversification allowed the firm to offset lower fee-based and transactional capital-markets revenue compared to the previous quarter, he said.

However, Kapoor cautioned that the “past few months have been challenging,” with Richardson Wealth advisors dedicating more time to helping clients navigate a volatile market.

“Market sentiment remains weak and this is likely going to have a protracted impact on our AUA, revenues and EBITDA for the coming quarters,” Kapoor said.

Insurance revenue for the quarter was $9.2 million, up from $0.5 million in the same period last year, thanks in large part to a “material contract” that closed in the quarter. While the firm is unlikely to match that revenue performance in future quarters, “we expect to continue building our insurance business more broadly thanks to our growing pipeline of opportunities,” said Tim Wilson, CFO of RF Capital, during the call.

Last year, RF Capital launched its own managing general agency after terminating a third-party partnership, and negotiated direct contracts with life insurance carriers, Kapoor said. The move has resulted in a “greater adoption of insurance strategies within our organization through a lot more financial planning being done,” he said.

Interest revenue for the quarter was $8.1 million, up by 83% or $3.7 million from the same period last year due to rising benchmark interest rates on the firm’s cash balances and margin loans.

“With interest rates expected to rise further in the second half of the year, we anticipate interest rate revenue to increase from Q2,” Wilson said.

Fee-based revenue was $62.3 million, down by 8.2% from $67.9 million in the previous quarter, but up by 6.0% from $59.0 million last year.

“We do not expect the market to stage a recovery this year,” Wilson said. He said the firm anticipates pressure on fee revenue to continue for the rest of 2022, partly offset by the addition of new advisory teams.

In Q2, Richardson added three advisory teams and lost one, and ended the quarter with 163 teams total. Kapoor said the firm expects to add two to three teams in Q3, with more expected to join in January and February 2023 after the firm moves to Fidelity Clearing Canada’s platform on Dec. 31. RF Capital currently uses its own clearing broker.

Consolidated adjusted EBITDA was $16.6 million for Q2, compared to $13.3 million during the same period last year. Reported net income was $58,000, compared to a $1.9-million loss in the same quarter last year. Wealth management adjusted EBITDA was $18.3 million, up by 18% from $15.5 million last year.