View more on these topics

Old Mutual Wealth chief defends vertical integration model


Old Mutual Wealth chief executive Paul Feeney has defended the company against claims of conflict of interest as the provider reports a significant increase in inflows from Intrinsic.

In a trading update published today, Old Mutual Wealth posted net client cash flow figures of £2.7bn for the first three months of the year, up 59 per cent from £1.7bn at the same time in 2016.

Flows from Intrinsic rose 60 per cent from £500m to £800m over the same period.

Speaking to Money Marketing, Feeney emphasised that much of Old Mutual Wealth’s business came from outside the network.

He says: “Primarily what we are is a wealth and investment solutions provider and adviser. That’s our business. The majority of our flows come from outside our own channels.

“Where Intrinsic are advising on investment solutions, these are multi-asset solutions. This is a really important point. Our own Old Mutual Global Investors funds within those make up a very small proportion, and the vast majority of products are other people’s funds.

“Our portfolio managers and our discretionary services are picking funds from the market, and if they choose to pick some of our internal funds they have exactly the same performance criteria as any other fund they choose.”

The trading figures do not include an update on the ongoing replatforming project to IFDS. Total costs for the project stood at £279m as at the end of December, compared with the £160m originally budgeted.

Feeney says he will update the market on progress no later than the company’s AGM on 25 May, but says £1.2bn in outflows over the last three months are unconnected with the replatforming.

He says: “Our platform now has £45bn in assets. There will obviously be a natural outflow from a business of that size. In overall terms the numbers may look bigger, but that’s because it’s one of the biggest platforms in the UK. Our platform alone did net client cash flow of £1bn in the first quarter, compared with £700m last year. We’re very pleased with that.

“We’ve put a lot of investment into our existing platform and proposition, to make sure we’re delivering the right products and services for advisers and clients.”



One third of advisers are worried about replatforming

One third of advisers are concerned about the impact of replatforming projects and their associated costs on the platforms they use, according to Money Marketing research. Based on a survey of 228 advisers, 34 per cent said they had concerns over replatforming. St James’s Place, Old Mutual Wealth and Fidelity FundsNetwork are among a number […]


SJP pays up to £1.6m for Technical Connection

St James’s Place’s acquisition of Technical Connection is set to cost the firm up to £1.6m. SJP’s accounts, published yesterday, show the wealth management giant could pay as little as £400,000 for the consultancy as £1.2m of the deal is based on hitting performance targets. Technical Connection will receive a £400,000 cash payment in April […]


Advisers in limbo over Govt delay to tax reforms

Advisers have criticised the Government’s decision to push back legislation that would introduce cuts to the money purchase annual allowance and tax-free dividend allowance for adding further uncertainty to client plans. Yesterday, the Government said it would remove the clauses in the Finance Bill that would introduce both measures, as well as a £500 tax […]


Fears grow over advisers’ investment due diligence

Concerns are being raised advisers are not carrying out robust due diligence when it comes to fund selection, with insufficient attention paid to asset management charges. Research by Money Marketing suggests many advisers carry out their investment due diligence themselves, but the findings also point to an over-reliance on rating agencies and marketing material from […]


News and expert analysis straight to your inbox

Sign up


There is one comment at the moment, we would love to hear your opinion too.

  1. The Vertical Integration Model from Old Mutual – so Vertical can be so much better than the Horizontal returns from Passive investing ! or index tracking . . .equally unimpressive for clients, when failing asset allocation – although cheap to run and shoehorning the masses into the index, cheap for financial institutions form the UK as well as the USA – but very expensive for the client and client outcomes.
    Investing for “Client Outcomes”, instead of Institutions Incomes – the good, the bad and the downright Ugly ?

Leave a comment