Axa injected a further £10m to develop the Elevate platform in 2013, despite the platform continuing to make a loss and contributing to overall losses at the holding company in which the wrap is held of around £15m.
Axa Portfolio Services, the parent entity in which both Elevate and the Self Investor direct platform are housed as well as a range of Isa and pension schemes on behalf of Axa Wealth, today (30 April) announced after tax losses for the year of £14.6m.
This is actually an improvement of 36 per cent on the losses of close to £23m for 2012, Axa said in a statement.
The firm said Elevate had “contributed to these losses” for 2013 after it invested more than £10m into “proposition development” over the course of the year. Axa said that assets under administration on Elevate rose 41 per cent over the year from £5.3bn to £7.5bn.
According to consultancy Altus, the platform sector made a net profit in 2012 for the first time since it began collecting data in 2005. Overall losses were made in each of the seven years through to 2011, with losses peaking in that year at around £50m.
While the sector as a whole returned to the black in 2012, margins at many firms are being squeezed as revenues only increased by 6 per cent compared with a 20 per cent increase in assets under administration.
Axa said the £10m investment last year was spent on initiatives including, among other things, providing access to more than 2,500 clean share classes, shaking up its pricing model and adding services such as model portfolios and stockbroking.
Dave Cheeseman, chief finance and risk officer, Axa Wealth, said: “Our focus is on continuing to invest in our investment proposition, providing enhancements which increase efficiency for advisers to benefit their clients and their business, rather than looking for shorter-term profitability for ourselves.”
