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Skandia platform sales hit by RDR as cost-cutting ensures profitability

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 which Skandia says is partly down to advisers preparing for the RDR.

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 from £2.8bn the previous year. Skandia says this was due to weakened investor confidence from volatile markets, and advisers focusing on preparing for 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 during last year, and that 2011’s results included a £32m policyholder tax smoothing adjustment.

Gross sales for Old Mutual Wealth dropped slightly from £12.1bn in 2011 to £11.9bn in 2012. The Skandia UK platform contributed £4.1bn, down 16 per cent from £4.9bn in 2011, with positive net flows of £2.2bn.

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 2012. OMAM (UK) funds under management were £4bn as at 31 December 2011.

Old Mutual Wealth chief executive Paul Feeney says: “2012 saw us make a number of changes to our business but our core purpose has not changed. We are on a mission to offer not just wider investment choice but better investment choices.  To do that we must offer more than simply a transactional platform and our focus and strategy is to provide wealth solutions that can help financial advisers manage their client’s wealth.”


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There are 5 comments at the moment, we would love to hear your opinion too.

  1. Skandia Service and flexibility of product is just abysmal. They can’t even produce accurate illustrations which is where the problems will start.

  2. I totally agree with Anonymous at 10.03. Trying to speak with the right person to get the right quote is a task in itself.
    Perhaps if Skandia didn’t do all they possibly could to avoid paying existing trail post RDR, advisers may have been happy to provide them with new business.

  3. They were too busy at the end of last year booting out quality staff in the middle of the biggest change in there platform in years. What sort if planning us that? I have ongoing complaints with them which would not have occurred if they had adequately resourced the changeover. A total mess and Peter Mann should apologise for the turmoil

  4. How many times over the years have providers cut back on staff and re-organized their proposition ‘ in order to allow us to be better placed going forward in our chosen markets’ blah blah and similar claptrap. And STILL we have advisers on these threads making basic comments about how difficult it is to get a quote. You’d think these re-structures would cope with that basic requirement by now. Senior personnel mentioned above have been through it all before and you’d have thought that overseeing change would include routine functionality.

  5. Agree with the previous comments but I usually find the staff on the phones very helpful and knowledgeable. I wouldn’t want to blame them for the technological problems with getting quotes.

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