In its annual results to 31 December, the group said it faced "significant headwinds" in the short term, and while its consumer and institutional businesses saw £1.3bn of inflows, the net figure of £19bn outflow combined with other related fee changes, including those for F&C REIT, delivered an annualised revenue loss of £35.5m.
Group underlying operating profits increased from £71.1m to £89m over the year, resulting in underlying earnings per share of 8.8p, compared with last year's 7p, attributable to shareholders.
Active dialogue
F&C said its contracts had expired with Achmea, Friends First and Millennium BCP which led to the asset withdrawal, and it remains in "active dialogue" with strategic partners.
The group said 2014 would be another important year, as its long-term contract with Friends Life is set to expire this year. Friends Life withdrew £6bn of fixed income assets from F&C last year, transferring them to its in-house manager.
Of Friends Life, chief executive Richard Wilson said: "We continue our ongoing discussions with this important client and are keen to establish whether there are future investment management and commercial arrangements that are acceptable to both parties."
Total assets under management fell from £95.2bn to £82.1bn, and Wilson called the results "encouraging", saying they reflected "strong investment performance and substantial improvements to net fund flows in [its] consumer and institutional business."
Of its AUM, 80% beat their investment objectives over one and three years.
Net debt was reduced from £97.3m to £76m, and board has agreed the acquisition of F&C by BMO Global Asset Management.
Wilson added: "The Board has unanimously recommended this acquisition to shareholders and believes that this will give us the opportunity to accelerate our growth plans for the business, with the support of a financially strong and ambitious parent."
