Old Mutual Wealth says the migration of its platform to IFDS could take longer and rack up further costs as total costs of the replatforming project hit £279m.
In its annual results, published today, Old Mutual Wealth says it is working to address the risks of delivering the replatforming exercise without the timescales and costs slipping further.
The project was originally budgeted to cost £160m, but costs have risen to £279m as at 31 December.
Old Mutual Wealth says: “Whilst progress continues to be made, this remains a complex project, and there are certain pressures which, potentially, could increase timescales and costs.
“Old Mutual Wealth is in active negotiations on these areas to reduce delivery and cost risk and to ensure it achieves the best outcome for the business.
“At this point, because of commercial confidentiality and the ongoing negotiations, it would be inappropriate to disclose further details. Old Mutual Wealth expects to be able to update the market by the time of the Old Mutual plc AGM in May.”
The platform arm of the business saw an 18 per cent fall in pre-tax profit from £33m in 2015 to £27m. The provider attributes this to the FCA’s sunset clause on trail commission, and “competitive industry margin pressures”.
Funds under management on the platform rose 20 per cent from £34.5bn to £41.4bn.
Intrinsic restricted adviser numbers have gone from 1,230 to 1,423. Last month Old Mutual Wealth announced it was acquiring Caerus for an undisclosed sum, with the deal expected to complete by June.
Old Mutual Wealth chief executive Paul Feeney says: “In 2016 we continued to transition Old Mutual Wealth into a leading, integrated, advice-led, UK investment and wealth management business. We made a number of acquisitions to grow and consolidate our distribution in the affluent and high-net-worth markets, we exited a number of non-core operations and continued to build the business for its independent future.
“We were particularly encouraged by the strong net client inflows, which reflect the increasing value of our wealth solutions for our customers and the attractive benefits of our integrated business model, in what has been a challenging year for the sector as a whole.”