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Skandia targets cost cutting after £5m platform loss

Skandia 480

Skandia posted a £5.1m platform loss for the first half of the year and has revealed plans to slash costs by half in an attempt to move into profitability within the next three years.

In an investor presentation earlier this week, Skandia parent Old Mutual Wealth said it made a pre-tax profit of £95m for the first six months of the year. Funds under management held on the Skandia platform totalled £20.4bn.

The presentation showed the platform brought in revenue worth 52 basis points of funds under management, with platform expenses outweighing this at 57 basis points resulting in a loss of 5 basis points as a proportion of funds under management.

A Skandia spokesman says these basis points figures represent an annualised rate in order to compare against future targets. On this basis, and based on funds under management of £20.4bn, the platform made a loss of £5.1m.

Skandia predicts its revenues will fall to between 40 and 45 basis points of funds under management over the next three years. It is targeting a reduction in platform costs of between 25 and 30 basis points.

Based on these estimates, Skandia is targeting platform profit of approximately 15 basis points of funds under management by 2015.


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There are 2 comments at the moment, we would love to hear your opinion too.

  1. Oh dear and that’s with the pre RDR smoke and mirrors!!

  2. So Old Mutual is being true to form. The more they got involved the more profits declined. What a surprise. It only surprises me that they can run a bath let alone a decent company that was making profits for years before they started to interfere.

    Anyway any sentient manager would have taken this with some measure of equanimity. In 2010 Old Mutual was getting its hands on, revamping the old Selestia platform and trying to run down the original Skandia platform. In 2011 and indeed in 2012 saw the cost impositions engendered by the RDR. Admittedly not of their making, but this is where costs should have been monitored, not after the event.

    Naturally the Regulator bears the blame for this (although as ever not the cost!) and the details are still a way from being ‘cast in stone’.

    In any other environment the perpetrator of the cock up (The Regulator) would have been open to sanction and have been heavily sued by those it messed about. But that of course is what you get when you stuff the regulator full of erstwhile accountants who think they are management consultants.

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