Royal London boosted profits by 20 per cent last year to reach £396m on the back of an increase in pension sales.
Individual pension sales increased from £6.3bn to £6.8bn, despite a number of headwinds for the sector as a whole including the end of the auto-enrolment roll-out, turbulent market conditions as a result of ongoing Brexit uncertainty, and the continuing low interest rate environment.
The mutual’s results note that “transfers from defined benefit schemes boosted sales, as low interest rates and healthy transfer values prompted people to switch to personal schemes with greater flexibility”.
The firm adds: “The original intention of the pensions freedoms was to enable flexible retirement plans based on individual needs, and this is starting to play out”.
Speaking to Money Marketing, Royal London chief executive Phil Loney says that transfer flows were around 20 per cent of personal pensions business last year – a “significant but not defining” proportion.
Loney also predicted these may be starting to slow across the market, based on FCA scrutiny, professional indemnity insurers becoming “jumpy” in some cases, and a slight deterioration in transfer values.
He says: “There is no doubt throughout the course of the year the market gradually settled down and DB flows were reducing…transfers will remain part of the market but perhaps not at the level they were.”
The firm managed to keep assets under administration at its platform Ascentric stable at £14.5bn, despite leadership changes and a replatforming project that knocked the platform offline for four days last year.
Ascentric boss Jon Taylor, who was tasked with overseeing Ascentric’s replatforming to Bravura technology, stepped down after more than three years in the role last May.
Royal London says it will “continue to consolidate, strengthen and build on the new technology in our platform business” in the results this morning, noting an “impairment” payment of £28m in 2018.
Loney tells Money Marketing that the firm is now in the “latter stages” of the upgrade, with 96 per cent of customers moved over to the new technology.
He says the project was “settling down now” and the focus would be “finishing off…not starting a new one”.
However, he adds that the company will talk more about the future of the platform in the second half of the year, with Loney noting that the company acknowledges a number of advisers have made comments about its branding.
On the asset management side of the business, funds under management remained at £114bn across the year, reporting higher external inflows to offset market falls.