Old Mutual Wealth saw net client cash flow (NCCF) increase by 92 per cent in the first half of the year to GBP2.3 billion (H1 2014: GBP1.2 billion).
This growth was driven by a clear strategy of integrating all the key elements financial advisers need to service their clients and favourable market developments in the form of the new pension freedoms.
Old Mutual Wealth’s strategy is to offer trusted financial advice, flexible products, discretionary investment management and high performing asset management, all underpinned by first class support for advisers and their clients. All components are managed to be market leading in their own right and financial advisers can choose how much of the integrated service they want to use.
The company’s financial results for the first half of 2015 are a strong endorsement of this strategy. IFRS Adjusted Operating Profit (AOP), pre-tax, was GBP151 million for the first half of 2015, up by 26 per cent compared to the prior year (H1 2014: GBP120 million). Funds under management (FUM) stood at GBP101 billion at 30 June 2015.
Paul Feeney (pictured), chief executive of Old Mutual Wealth, says: “Our focus has been to build a business that offers financial advisers all the components they might need to service their customers, whether that’s network support, flexible and innovative products, discretionary investment management or top performing asset management. Advisers will decide how much of the integrated proposition to use for each client but by offering it all in one place we can do so at very good value for advisers and their clients and underpin it with first class service. These results are starting to show that strategy gaining significant traction in the market.
“At the same time, we are seeing huge demand for our flexible income drawdown product. Retirement income has been redefined beyond recognition and income drawdown has come of age following the pension freedoms. Annuities, for so long the default option for turning savings into an income, have fallen from grace with just 16 per cent of those not yet retired looking to use an annuity. In contrast, around 65 per cent of current retirees are receiving their income through an annuity.
“With further complexities introduced in the summer budget around the taxation of death benefits, we expect to see even greater demand for financial advice as people consolidate their retirement funds with providers offering full access to the freedoms alongside packaged investment solutions that meet the changing investment needs in later life.”