Citywire printed articles sponsored by:
View the article online at http://citywire.co.uk/wealth-manager/article/a611227
Wealth flows double to help Standard Life's profit rise 15%
by Sarah Miloudi on Aug 14, 2012 at 07:49
Standard Life Investments' (SLI) third party net inflows have cooled to £0.6 billion, from the £2.9 billion posted in last year's first half, however its wealth division has helped power a group-wide surge in operating profits.
Gross flows into Standard Life's new-style propositions stand at £2.7 billion, according to its half-year report, versus £3.1 billion in 2011's first six months.
Although a slight fall, this comes against a backdrop of subdued consumer sentiment, ongoing economic uncertainty and increased commission-based competition ahead of the retail distribution review (RDR), the firm said, and it pointed to the strong growth seen elsewhere in the business, particularly its discretionary arm where net flows have doubled.
According to the group's results, Standard Life Wealth has continued to build its presence in the IFA market and over the period reviewed saw net flows into its higher margin propositions jump more than 100%, rising to £390 million from £193 million a year ago.
'Good momentum' has been maintained in its platform business too, Standard Life said, and the business now collectively has total assets under administration of £12.8 billion, a gain of 19% from £10.8 billion the year before.
At a group level, Edinburgh-based Standard Life said its operating profit before tax had grown 15% to £302 million, from £262 million in the same period the year before, and some 19% ahead of expectations. At a UK-level, Standard Life's operating profit before tax grew 62%, to £141 million from £87 million.
David Nish (pictured), chief executive, said: 'These results show that Standard Life is performing well. We have delivered increased profits, cash flow and dividends and we are achieving ongoing improvements in operational and financial performance.
'The UK results, where profits benefited from higher income and significantly lower costs, demonstrate the strength and scalability of our propositions and our brand.'
Industry's 'significant' change
Nish added that while the industry as a whole is undergoing a period of 'significant change', Standard Life believes this also brings an opportunity.
'We are well prepared for the regulatory and market changes on the horizon, and have invested to make sure we are even better placed to meet the needs of our customers and their advisers,' Nish explained.
News sponsored by:
Subscribe to Wealth Manager magazine and rack up CPD points
Citywire Wealth Manager has partnered with CISI to enrich the experience of subscribers to our magazine.
Today's top headlines
More about this:
Look up the shares
Aberdeen Live supplement: Fundamentals point to ongoing flows and solid returns from EMD
After a record year for inflows and market-leading performance in 2012, emerging market debt has taken a large step towards the mainstream. Our recent debate covers the outlook for the asset class this year and where opportunities can be found.