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Standard Life profits boost ahead of RDR

Paul Matthews Standard Life
Paul Matthews

Standard Life has reported a 62 per cent increase in UK pre-tax operating profit for the first half of 2012, from £87m to £141m, as the provider gears up for automatic enrolment and the retail distribution review.

The rise in UK profits was driven by a 5 per cent increase in fee based revenues, from £309m in the first half of 2011 to £325m this year, and a 21 per cent reduction in acquisition expenses, from £107m to £84m.

Profits from Standard Life’s fee based business rose 31 per cent, from £118m to £155m, while corporate pension profits were up 60 per cent, from £25m to £40m.

Total assets under administration on the provider’s platforms increased 19 per cent, from £10.8bn in the first six months last year to £12.8bn this year. There was a 17 per cent increase in advisers using its wrap, from 926 to 1,087 with the average assets under advice for each firm increasing from £8.2m to £8.8m.

Total Sipp customers increased 22 per cent to 147,000 while assets under administration increased nearly 10 per cent, from £16.4bn to £18bn.

Standard Life UK chief executive Paul Matthews (pictured) says: “The 62 per cent increase in the UK’s operating profit shows we have made the right decisions to prepare the business for the regulation changes facing the industry in the coming months and years.

“The implementation of RDR is just 139 days away and our retail business is well positioned to help advisers prepare for the future and ensure they are in a position to trade profitably in 2013 and beyond.  

“The fact that we have been operating on an adviser fee, non-commission basis, for a number of years now means we are on track to deliver our RDR programme ahead of schedule and will be fully compliant from 15 October.”

Standard Life’s UK business was the catalyst for a 15 per cent increase in the group’s overall pre-tax operating profit, from £262m in the first half last year to £302m this year.

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Comments

There are 6 comments at the moment, we would love to hear your opinion too.

  1. Becoming a headcase IFA 14th August 2012 at 8:51 am

    Profits up!
    Maybe something to do with poaching IFA clients.

  2. What a surprise!!
    To think none of the big companies wanted RDR because of the costs, what cost?
    They must be at least 3% better off when RDR is fully in place as they will not be paying advisers for the business, the public at large will be paying up front charges for the business.

  3. Good old Standard Life. They better make hay while the sun shines because they along with every other provider are going to struggle and struggle HUGE from next year. Good luck to us all

  4. @David – I think large companies were more concerned with customer access (for instance the consequences of the removal of so called ‘factoring’). As for costs, what are your thoughts on the repayment timeline for all of the IT, process, documentation and training costs (not to mention the cost of running and resourcing the delivery projects)? Finally, you may have overlooked that the future margin squeeze, and competitve play, will put downward pressure on the Product Charges – with this in mind I am interested in where a 3+% gain is derived from?

  5. I presume all of these have now been factored in and paid for yet they still make a profit. So I suspect with the removal of factoring that is a minimum of 3% pa extra profit.
    Future margin squeeze, is that not current. I presume that the competion in the future will be only slightly different to that Standard Life currently have or are more companies that we do not know coming into a market that will have a problem making profit.

  6. I am sure they can make up any shortfal in profits or bonuses by stealing from the with-profits suckers as usual!

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