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.”