AvivaMar 9 2023

Aviva’s wealth arm sees profits fall 11%

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Aviva’s wealth arm sees profits fall 11%
[REUTERS/Simon Dawson]

Aviva recorded an 11 per cent dip in profits for its wealth arm last year, which includes its adviser platform and asset management business Aviva Investors.

In full-year results published today (March 9), Aviva said operating profit for the wealth business fell from £147mn in 2021 to £131mn last year as market volatility hit its revenues.

Across the whole business, however, operating profit was up 35 per cent - to £2.2bn from £1.6bn - prompting analysts to dub the company's results an “overall positive”.

Wealth arm

Over the year, net flows to Aviva’s wealth arm reached £9.1bn - including £3.8bn flowing to its adviser platform. 

Aviva said positive net inflows were more than offset by adverse market movements of around £15bn, primarily reflecting a fall in overseas equity prices.

While positive, net flows to the adviser platform were 32 per cent lower due to a dip in new business.

The wealth arms’ overall assets sat at £149bn at the end of 2022, falling from an opening position of £152bn. Around £44bn of this was sitting on the platform.

Last year, Aviva bought IFA Succession Wealth, adding over £3bn in assets to Aviva’s wealth arm. In its results, Aviva recorded £7mn in costs relating to the acquisition.

“Our wealth business remains positioned to grow, and while market conditions are challenging in the near-term in adviser platform, our workplace business offers strong growth opportunities,” Aviva said in its results.

Protection, mortgages and retirement

Over on the protection side of the business, Aviva’s operating profit was flat - remaining at £229mn, the same profit it recorded in 2021.

Aviva said that while new business across its protection arm was up by 18 per cent, this was offset by one-off group income protection claim payouts.

The group’s retirement arm, which includes annuities and equity release, was up 32 per cent at £851mn from £645mn.

Aviva said over the year it expanding its adviser resources to support growth in equity release, having recorded a 16 per cent uptick in equity release sales last year.

Chief executive for Aviva’s UK and Ireland life division, Doug Brown, said robust sales growth spanned Aviva’s workplace pensions, equity release and health and protection portfolios.

“Our value of new business increased, with margins improving across all of our insurance, wealth and retirement product portfolios,” said Brown.                                                                                                                                                                                                                                          

“In our retirement business, we continued last year’s strong growth in equity release with sales increasing year-on-year as changes to our proposition attracted new business within a growing market.”

Brown said the wealth arm was helped by workplace pension performance, while new group protection business outshone its individual protection sales.