The group’s first half figures showed that Intrinsic is now fully integrated into Old Mutual Wealth and increased its restricted network to 988 advisers during the first six months, up from 840 in the first half of 2014.
In April, Intrinsic was selected by Sesame Bankhall Group to become their preferred adviser network partner after the latter pulled the plug on their network for investment and pension ARs.
The results said this is expected to lead to about 220 new wealth advisers joining the network. By the year-end, Old Mutual expects to have more than 1,200 restricted advisers within Intrinsic.
The results also gave an update on plans to build a best-in-class platform and outsource various administration functions to International Financial Data Systems.
Old Mutual is half way through building the requisite coding, with detailed testing and roll-out to follow.
The cost of the project is now expected to be £50m more than the £160m originally set aside, with Old Mutual’s group chief executive Julian Roberts saying this was due to additional costs in relation to pension liberalisation, corporate activity, regulatory changes and the deferral of completion dates.
In addition, he said the project would now include building a new customer interface.
Mr Roberts said: “These improvements will ensure even better digital functionality and flexibility and their development will cost a further £40m.
“We now expect the system to go live at the start of 2017, with the timing dependent on minimising customer disruption and the outcome of detailed testing.
He added that the group incurred £40m of costs in the first half of the year with regard to this project and these costs are expected to be approximately £90m for the full year.
Meanwhile, Intrinsic restricted advisers delivered 11 per cent of the Old Mutual Wealth’s platform sales in the first half of this year.
The provider achieved an adjusted operating profit of £904m, up 20 per cent on the first half of 2014.
In his last set of results as group chief executive, Mr Roberts said it had been an exceptional six months as the business “will be a net beneficiary from the ongoing reform in the pensions market.”
He commented that the pressure to deliver full access to pension freedoms, including drawdown for beneficiaries of a pension, creates additional opportunities. “Nevertheless, I believe that the government must balance pension liberalisation with the need for individuals to save for their retirement.”
The results showed Intrinsic restricted advisers delivered 11 per cent of platform sales and 24 per cent of platform net client cashflow in the period.
Old Mutual Global Investors now manages some 13 per cent of platform funds, up from 9 per cent at the same point in 2014, while the platform generated £1.2bn of gross flows into OMGI.
Mr Roberts added that Old Mutual continued to build an advice and distribution network in the UK, which is “a critical element for a retail financial services business to succeed under the new regulations”.
emma.hughes@ft.com
