Gross sales of £3.8 billion in the third quarter were up slightly on Q3 2013 (£3.7 billion), taking year-to-date gross sales to £11.5 billion, a 10% increase on last year. Funds under management (FUM) have increased to £82.2 billion, up 5% since the start of the year, following strong net flows into the UK Platform and Old Mutual Global Investors.
Old Mutual Global Investors
OMGI has delivered strong net inflows in 2014 improving significantly on prior year. In Q3 NCCF was £0.3 billion, driven by gross sales of £2.0 billion which are consistent with Q3 2013 (£2.0 billion). Year to date NCCF of £1.4 billion is 180% higher than the same period in 2013.
OMGI FUM has increased by 9% since the start of the year and is now £17.4 billion. An additional £1.8 billion, representing the Cirilium fund range acquired with Intrinsic, will become part of Old Mutual Global Investors’ product proposition in December 2014.
The Global Equity Absolute Return Fund, UK Alpha Fund and North American Equity Fund have been popular investment choices. The new WealthSelect researched fund range and managed portfolio service continues to gather momentum and has now attracted £0.5 billion of new investment since its launch in February.
Despite being a traditionally quieter period in the UK, gross sales of £1.3 billion reflect the strongest quarter of the year for the UK Platform resulting in NCCF of £0.5 billion which is 25% higher than the comparative period (Q3 2013: £0.4 billion). The platform has benefited from the increased ISA allowances which came into effect on 1st July, and sales of bonds and pensions were also above prior year in the quarter. UK Platform FUM stands at £29.5 billion, an 8% increase this year.
IntrinsicThe Intrinsic integration is progressing well and 6% of September sales via the UK Platform were sourced via Intrinsic advisers, up from 3% in July.
Gross sales of £0.4 billion were broadly flat in the quarter compared with the same period in 2013 (£0.4 billion) with good sales in UK offshore offset by lower sales in the Far East. International FUM of £15.3 billion is 2% higher than the start of the year.
Europe (open book)
Europe NCCF of £0.2 billion in Q3 was significantly higher than prior year with particularly strong net client cash flow in Italy (Q3 2013: 0.0 billion). European markets were generally more active with both sales and outflows increased over prior year.
Heritage (closed book)
Heritage NCCF in Q3 2014 was £(0.1) billion and is consistent with prior year (Q3 2013: £(0.1) billion). The strategic focus for the heritage businesses remains on retention of assets and an indicator of the success of these strategies is given by the surrender rate as a proportion of the total opening book, 8.9% (2013: 10.8%). The disposal of the German and Austrian businesses was completed on 1 October which will reduce year end FUM for Europe by £4 billion.
Paul Feeney, chief executive of Old Mutual Wealth, comments:
“Our aim is to offer people everything they need from a wealth manager to secure their financial future: financial and retirement advice, platforms and retirement solutions, investment management and asset management. Customers and their financial advisers may choose to only access one or two of those elements from us but if they want to access a broad range of solutions in one place, they can.
“The acquisitions of Intrinsic and Quilter Cheviot this year add the elements of that customer offering that we didn’t previously have and we continue to develop our platform and asset management businesses. We have added significant fund management talent to Old Mutual Global Investors with the recent appointments of Joshua Crabb, Ian Orminston and Russ Oxley. We have also removed our minimum platform charge and our pension drawdown fee to deliver greater value to customers.
“We now operate under one brand following the rebrand of Skandia to Old Mutual Wealth and are well positioned to continue developing great value and transparent products and services for financial advisers and their clients.”