RDR puts pressure on Old Mutual UK legacy business
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Old Mutual is reviewing its UK legacy business as the retail distribution review pushes investors away from traditional life products and puts pressure on business retention.
Skandia, which is part of Old Mutual, stopped offering its multi-bond and critical-illness polices in September. Commission-based personal pension products have also been closed to new business.
In an interim management statement last week Old Mutual said changing customer requirements in the UK and the RDR are combining to increase demand for platform services while reducing dem-and for more traditional life products.
It says: “We will continue to review our remaining UK legacy range in light of changing customer demand and ahead of the RDR rules coming into effect in 2013. With the continued shift in the UK market towards a simplified investment and pension product suite, we anticipate increasing pressure on retaining our UK legacy funds.”
Skandia UK saw a 138 per cent increase in net client cashflow for the first nine months of this year from £800m to £1.9bn.
The company’s market share grew from 5.8 per cent at the end of last year to 6.9 per cent this year.
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