Comprising Skandia and Old Mutual Global Investors, Old Mutual Wealth's profit figure grew from £195m to £217m over the 12 month period to end December, which it attributed to growing demand for platform-based management solutions against the post-RDR landscape.
Assets under management or administration grew by 13%, from £69.2bn to £78.5bn to 31 December 2013.
Underlying pre-tax profits have grown 36%, from £160m to £217m, but Old Mutual Wealth noted that the 2012 reported profit figure of £195m included £13m from Finland which was sold in H2 2012 and exceptional policyholder tax contributions of £22m, in part due the move to a new life tax regime.
Buxton: key driver of inflows
Old Mutual Global Investors saw its gross sales rise 68%, from £4.5bn to £7.6bn, with improved sales across its alternatives and equities desk, which saw Richard Buxton join from Schroders in June last year as head of equities – a move which has seen approximately £1bn of inflows hit the group.
Market conditions, added consumer confidence and a shift from fixed income back into equities were also cited as reasons for the success.
OMGI posted a net client cash flow figure of £700m, which accounted for £1bn outflow due to the disposal of the Skandia Nordic business.
UK platform sales directed to OMGI funds were 16% for the year, up from 14% the previous year with their combined AUM now standing at £16bn.
Platform-based investment outsourcing
The UK platform reported an operating profit of £13m for the full year – compared with last year’s £2m. Its AUA grew by 21% on 2012, to £27.3bn, which the group said was down to higher demand for packaged investment solutions from financial advisers looking to outsource their investment process post-RDR.
Old Mutual Wealth chief executive Paul Feeney said: “People require high quality financial advice and portfolio management to help them achieve their financial goals. With developments like WealthSelect, our newly launched range of portfolio management solutions, we are going beyond being simply a transactional platform to providing the solutions that can help financial advisers manage their clients’ wealth.
“We are well on the road to creating a market leading asset management business in Old Mutual Global Investors. The hires we have made this year are a signal of our ambition for a business that will be a key driver of our future growth alongside our investment platforms.”
Picked up UK's largest adviser network
Meanwhile, Old Mutual Wealth has announced its acquisition of Intrinsic, the UK’s largest network with 3,000 independent and restricted advisers, subject to regulatory approval.
With a 63% bias in favour of restricted, Old Mutual Wealth said its customers can expect an “aligned proposition that uses the combined scale and buying power of the group to deliver an integrated service and excellent value.”
Intrinsic’s existing brand, management team and business model with remain intact and distinct within Old Mutual Wealth.
It Cirilium investment proposition is backed by Henderson Global Investors and there are “no plans to change that arrangement” but OMGI funds will be added to the investment range in future.
There will be some immediate changes for Intrinsic advisers including:
- Skandia’s protection products will be added to Intrinsic’s panel for its mortgage and protection advisers;
- Intrinsic's restricted advice proposition will see the Skandia platform added to Intrinsic’s platform panel;
- Intrinsic's Cirilium asset management solution – run by Henderson Global Investors – will continue to be part of its investment proposition with Henderson and OMGI considering each other "strategic partners";
- Old Mutual Wealth will work with Intrinsic to further develop core investment propositions utilising OMGI's asset management strength.
Feeney added: “Today we have reinforced our commitment to financial advice through the acquisition of Intrinsic which is an important step in creating the UK’s leading retail investment business, improving access to wealth management services for customers across the UK.”
Richard Freeman, CEO of Intrinsic said: “Ownership by Old Mutual Wealth will bring a host of benefits to our customers and to our business. It will deliver a first-class proposition with the investment platform, investment solution and advice relationship fully aligned in a way that provides real value for money.
“In addition, the support of a single, stable shareholder with Old Mutual’s financial strength and global experience in advice and distribution will further strengthen the business and deliver long-term security for our customers.”
In spite of the acquisition, Old Mutual Wealth will remain committed to also servicing the wider financial advice market, which it said was recently demonstrated by the launch of WealthSelect.
