Friends Provident is pulling out of wealth management and will focus resources on group pensions, protection and offshore business in a bid to improve profitability.
Announcing the results of its strategic review last week, the company said that it will sell its 53 per cent stake in F&C Asset Management as well as wealth management arm Lombard and high-net-worth IFA Pantheon.
Life and pensions chief executive Ben Gunn says the firm will take a more selective approach on group pensions by ending initial commission on new schemes and focusing on acquiring bigger schemes.
It is investigating whether to close its with-profits fund to new business but says it has no intention to sell the back book if this happens.
Gunn says: “We have analysed every part of our business in detail and reshaped it to reflect the world today. It is a self-financing strategy that focuses on our key strengths in the market, which are group pensions, protection and the international business.”
The firm has had to factor in a £160m charge in its 2007 results because of poor persistency across all product lines.
Total UK new business grew by 7 per cent to £4.4bn from £4.2bn in 2006 while group pension sales grew by 12.5 per cent to £2.6bn from £2.3bn.
Investment business fell by 27 per cent to £501m from £687m while protection sales saw a 4 per cent drop to £413m from £432m.
Friends says that the market for investment bonds was hit by uncertainty over capital gains tax changes, leading to a loss of business to competitors in the guaranteed product market.
The company aims to reduce costs by £40m by the end of 2009 and will cut staff numbers by 600.