CompaniesFeb 27 2015

OM Wealth puts profits down to restricted advice push

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OM Wealth puts profits down to restricted advice push

Customer demand since the Retail Distribution Review was the main driver behind a 5 per cent year-on-year increase in an adjusted operating profit for Old Mutual Wealth, up to £227m in 2014.

When profit contributed from businesses sold during the year is adjusted, the year-on-year growth was in fact 11 per cent, according to the group’s annual results for last year.

Net client cash flow of £3.7bn - compared to 2.4bn in 2013 - was boosted by demand for investment solutions from Old Mutual Global Investors and the new WealthSelect investment service on the company’s platform.

Gross sales were up by 11 per cent to £16bn and funds under management hit a new high of £82.5bn at the end of 2014 - compared with £78.5bn in 2013.

The report noted the acquisition of Intrinsic last summer and the deal for Quilter Cheviot, which completed yesterday, gave the group “an integrated customer offering encompassing financial advice, platform and products”.

OM Wealth currently works with 9,000 financial advice firms in the UK, with personal protection products and elements of the OMGI fund range being added to Intrinsic’s product panel for its 930 restricted advisers. Intrinsic’s total advisor count was 3,050 at year end.

Earlier this month Intrinsic launched a practice buy-out initiative to enable advisers to grow and realise value from their business.

The platform saw profit increase to £19m last year, from £13m the year before, with net client cash flow of £2bn down from £2.4bn the previous year, but gross sales of £5.1bn were up from £4.7bn in 2013.

Personal pension sales were 14 per cent higher than the prior year and earlier this month OM Wealth announced the launch of its new flexi-access drawdown facility on the platform pension in time for the reforms due in April.

Paul Feeney, OM Wealth’s chief executive, admitted that people do not wake up in the morning thinking about platforms or individual funds.

“They think about how they are going to fund their retirement or their children’s school fees; things that mean something to them. For that they need advice, the right product, a great performing investment portfolio and excellent service.

“Increasingly I believe advisers and their clients will be looking to source those elements in one place, via companies that can offer an integrated proposition efficiently and cost effectively.

“That is what we are aiming to achieve and we will continue to work with advisers to build new products and services that they and their clients need.”

peter.walker@ft.com