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Skandia platform to cut costs after £5 million loss

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Skandia platform to cut costs after £5 million loss

Old Mutual Wealth is set to cut costs on the Skandia platform by half after it made a £5 million pound loss in the first half of 2012.

In an presentation to investors Mark Satchel, Old Mutual Wealth's chief financial officer, predicted that platform revenues as a proportion of the funds under management would fall from 52 basis points (bps) to around 40-45 bps in the future.

The presentation showed that revenues of 52bps of the platform’s £20.4 billion in funds under management were offset by expenses of 57 bps.

This resulted in a loss of £5 million, or 5 bps of £20.4 billion.

Skandia said it was targeting a cut in platform expenses by around half from 57 bps to 25-30 bps.

The £5 million loss for the first half of 2012 follows the £11 million loss the platform made in 2011 which it said was due in part to its investments for the retail distribution review.

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