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NU writes down £84m on outsourcing Lifetime to Scottish Friendly

The cost of outsourcing Norwich Union’s wrap to Scottish Friendly is likely to be £84m, parent company Aviva revealed in its interim results this week.

Aviva is making an £84m provision for “impairment losses and restructuring costs” involved in moving its platform to the third party provider.

The Aviva results also revealed that in the first six months of this year alone it lost £23m in costs associated with the Lifetime wrap. This is in addition to the £31m it spent on Lifetime during the course of 2007, bringing total losses for the year and a half combined, including the transfer costs, to £138m.

Lifetime managing director Toby Strauss says there will be no exit charges for in-specie transfers off the Lifetime wrap should advisers not wish to move their clients to Scottish Friendly.

Threesixty partner Phil Young says: “The figures speak for themselves. Even successful wrap propositions take a long time to make money so this begs the question of whether Norwich Union’s platform will ever be profitable.”

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