Skandia International’s offshore bond sales fell 26% in the first half of this year compared with the same period in 2011.
This percentage drop for the company, which is part of the Old Mutual Wealth Management group, is broadly in line with the ABI’s industry average for offshore bonds reported for Q1.
Against this backdrop of lower sales, Skandia International’s pre-tax profits fell by 14%, from £42m to £36m, and its funds under management dropped by 5.8% from £15.5bn to £14.6bn.
The impact of Skandia International’s recently launched ‘Wealth Interactive’ management service which is currently being soft launched in Singapore has yet to impact on the figures.
The company, which clearly has high hopes for this new initiative, stated that “wealth interactive represents a significant investment for Skandia International in order to transform the way it works with financial advisers and customers.”
Its new RDR-compliant offshore portfolio bond products in the UK enable adviser charging to be facilitated and fund manager rebates will be returned to the customer. Top-ups will be accepted in to the existing pre-RDR products, which will also get the new wealth interactive features in 2013, the company stated.
Old Mutual Wealth Management (OMWM) comprises Skandia International, Skandia UK, the recently merged Skandia Investment Group (SIG) and Old Mutual Asset Managers UK (OMAM) and a number of Skandia businesses in continental Europe.
In Europe the Skandia businesses in Austria, France, Germany, Italy, Poland and Switzerland have been brought together to form Old Mutual Wealth Management Europe. A single operational model is being introduced for this business with a central hub being created in Luxembourg. The business is focusing on affluent customers in Italy, France, Germany and Austria and pre-affluent customers in Poland.
In overall terms, Old Mutual Wealth Management made pre-tax profits of £95m for the first half of 2012, down 4% against the comparative period’s underlying profits of £99m (taking into account a one-off H1 2011 policyholder tax smoothing of £16m).
Paul Feeney, chief executive of Old Mutual Wealth Management, said: “Market conditions are undoubtedly challenging for the financial services market but I believe there are significant opportunities to focus on. The RDR is naturally key for us and we see a significant opportunity to build new, customer focused investment solutions that will be in demand post RDR from all types of financial adviser".
He added that there will always be a place for open architecture but risk targeted funds, income solutions, model portfolios and DFM services will also be in high demand post RDR.
“In tough market conditions, we continue to see significant growth opportunities for our international business in Asia, Latin America and South Africa. In Europe we are in the process of refocusing our businesses on our core markets, with a central Luxembourg hub to provide a solid platform for growth."
