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Skandia cost-cutting sees £2m profit despite sales drop

Skandia Building 480

Skandia has posted a £2m pre-tax operating profit for its platform for 2012 despite a 26 per cent fall in sales.

The platform made a £4m loss in 2011. The company attributes the turnaround in profit to its cost cutting programme carried out last year.

Sales for the platform fell to £2.1bn in 2012, down from £2.8bn the previous year. Skandia says this was due to weakened investor confidence and advisers focusing on the RDR.

Parent company Old Mutual Wealth, which includes the Skandia platform and Old Mutual Global Investors, has reported an operating profit of £195m for 2012, down 13 per cent from £225m in 2011.

Old Mutual Wealth attributes the fall to £15m in one-off costs related to cost-cutting programmes carried out last year, plus the £32m policyholder tax smoothing adjustment included in 2011’s accounts.

Overall funds under management rose 10 per cent from £62.8bn to £69.2bn, while funds under management on the platform increased 20 per cent from £18.8bn to £22.6bn.

Old Mutual Global Investors, created from the merger of Old Mutual Asset Managers (UK) and Skandia Investment Group, saw a 67 per cent fall in operating profit from £9m to £3m. Funds under management were £13.8bn as at 31 December.

OMAM (UK) funds under management were £4bn as at 31 December 2011.

Pilot Financial Planning director Ian Thomas says: “The £2m profit is quite a big turnaround achieved by cost-cutting. Revenue streams of all platforms are going to keep coming under pressure so there will need to be a continued focus on managing costs.”

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  1. I find this a tad disingenious unfortunately. Saying they have profit when all they have done is let people go – and some very good people at that!

    I wonder what the level of support is going to be there this year both in sales and platform.

    Whilst we all appreciate that people are the most expensive part of any business, without the people your don’t have a business.

    I have always admited Skandia, but am feeling like they have lost their way a little bit as the strive to profit.
    Is it really sustainable without the people!

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