OMI’s profits fell by nearly a quarter to £37m from £49m in 2013, with exchange rate movements reducing fund-based income.
The company, which is part of Old Mutual Wealth, said the cost of implementing its online wealth management service, Wealth Interactive, across international markets, led to the fall. It added that these costs are not expected to reoccur.
International cross-border sales dropped 4% to £1.8bn from £1.9bn in 2013.
Despite regulatory changes in South Africa and Hong Kong leading the company to review its business in these markets, sales in the UK and South Africa were higher than last year.
However, Asia saw lower year-on-year sales despite improving during the second half of the year following developments in regional equity markets and strengthening investor confidence.
Hong Kong’s wealth management market was affected last year by the announcement that indemnity commission was to be banned from 1 January 2015, with advisers receiving commission in intervals rather than entirely up front.
Last month, OMI launched a wealth management product which is fully compliant with the ban.
In its European business, OMI saw net client cash flow (NCCF) increase by 40% on the previous year to reach £700m, with particularly good sales in Italy, as it continues to expand its network of strategic distribution partners in the country.
“During the year, we made significant progress in simplifying our operations to focus on a select number of core growth markets and we reduced our operational and regulatory risk exposure in the process,” said OMI.
“We completed the sale of Skandia Poland to Vienna Insurance Group, the sale of Skandia Liechtenstein to Aspecta Assurance International AG, the sale of the German and Austrian businesses to Heidelberger Leben Group,” it added. “Earlier this year, we also completed the sale of the France and Luxembourg businesses to Apicil.”
As a group, Old Mutual Wealth saw a 5% growth in profit from £217m in 2013 to £227m in 2014, while NCCF grew by 61% to reach £3.7bn.
Paul Feeney, chief executive of Old Mutual Wealth, said: “During 2014 we made great progress in aligning our business to what we believe customers need to help them secure their financial future.”
