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Old Mutual Wealth sales up 45% in Q3 2015

04/11/2015

Old Mutual Wealth delivered strong results in Q3 2015, consolidating its position as the leading wealth management business in the UK:

  • Gross sales up 45% at £5.5 billion (Q3 2014: £3.8 billion) for the quarter, taking year-to-date gross sales to £15.3 billion, up 32% compared to the same period last year (2014: £11.5 billion)
  • Net client cash flow (‘NCCF’) up nearly threefold at £2.3 billion (Q3 2014: £0.8 billion) for the quarter, bringing year-to-date NCCF to £4.6 billion, up 130% compared to the same period last year (2014: £2.0 billion)
  • Year-to-date funds under management (‘FUM’) up 20% at £98.7 billion (1 Jan 2015: £82.5 billion) since the start of the year, boosted by the acquisition of Quilter Cheviot (QC year-to-date FUM £17bn) and strong net flows into the UK Platform and Old Mutual Global Investors.

Paul Feeney, chief executive of Old Mutual Wealth, comments:

“We have delivered an excellent set of results in Q3 2015 against a backdrop of volatile investment markets. Huge demand for our income drawdown product has pushed our platforms sales to record levels. We recently launched our ‘IncomeSelect’ retirement proposition to provide the tools, products and support advisers need to ensure their clients can fully benefit from the new freedoms.

“We continue to collaborate across the business where it adds value to advisers and their clients. In Q3 we formed a new multi-asset unit combining the investment knowledge of Quilter Cheviot and Old Mutual Global Investors for the benefit of all our clients and advisers in the UK and internationally.”

“I believe that these results demonstrate that we are building a new breed of wealth management business with clients’ needs at the centre. We have created a unique proposition encompassing multi-channel advice, high quality investment and retirement solutions and end-to-end service enabled by our UK and international platforms.”

Business updates:

Investment Division

The Old Mutual Wealth Investment Division was formed in Q3 2015 comprising Old Mutual Global Investors and Quilter Cheviot, two superb investment businesses managing clients’ money.  In September 2015, the business combined the capabilities from Quilter Cheviot and Old Mutual Global Investors which incorporates one dedicated unit focused on multi-asset investment solutions.

Asset management – Old Mutual Global Investors

Net flows into Old Mutual Global Investors grew significantly in 2015. Year-to-date NCCF was up 43% at £2.0 billion compared to the same period last year (2014: £1.4 billion).  In Q3 NCCF was £1.0 billion, driven by gross sales of £2.7 billion. Year–to-date gross sales were up 19% at £7.8 billion compared to the same period last year (2014: £6.5 billion). Old Mutual Global Investors’ FUM is up 6% since the start of the year at £22.2 billion.  The net investment into Old Mutual Global Investors funds through International markets over 2015 has more than doubled compared to the same period last year (2015: £0.8 billion, 2014: £0.3 billion).

Old Mutual Global Investors is benefiting from being part of a vertically integrated business. In the quarter, £0.3 billion of NCCF came into Old Mutual Global Investors from Intrinsic via the Cirilium fund range and £0.3 billion of Old Mutual Global Investors net flows came via the UK Platform.

Investment performance remained good with 52% of core funds in the top quartile over a three year period and a total of 71% of funds above the median.

The on-boarding of Old Mutual Global Investors’ Rates and Liability Driven Investment Team, headed by Russ Oxley, has completed and the Old Mutual Absolute Return Government Bond Fund and the Old Mutual Liquid Macro Fund were launched on 7 October 2015. Old Mutual Global Investors has also redesigned the strategy of the Old Mutual Generation multi-asset portfolios, in collaboration with financial advisers, to capitalise on the new pension drawdown rules and benefit investors in decumulation. 

Discretionary investment management – Quilter Cheviot  

In Q3 2015, Quilter Cheviot won a number of significant new client mandates, contributing to NCCF of £0.4 billion. Quilter Cheviot has generated NCCF of £0.7 billion to Old Mutual Wealth since the acquisition completed in February 2015. Quilter Cheviot FUM stood at £17.0 billion at 30 September 2015.  

Integration with Old Mutual Global Investors has continued at a pace with:

  • The creation of a new dedicated unit focussed on multi asset investment solutions
  • The agreement that Quilter Cheviot becomes the investment adviser to the Old Mutual Ethical fund.

Financial advice – Intrinsic

Nearly 200 restricted financial planners joined the Intrinsic network during Q3 2015 as part of Intrinsic’s agreement with Sesame Bankhall Group to become their preferred adviser network partner. Intrinsic also reached a provisional agreement with Sesame Bankhall Group to acquire the Financial Adviser School, the UK’s leading facility dedicated to training the next generation of professional advisers.

On 2 October 2015, Intrinsic announced the launch of a new national advice business, Old Mutual Wealth Private Client Advisers. The new business is an appointed representative of Intrinsic and leverages the investment capability of Quilter Cheviot and Old Mutual Global Investors to deliver market-leading advice and investment management solutions to clients.

Intrinsic’s restricted proposition accounted for 24% of NCCF via the UK platform to the end of September. Year-to-date, the Old Mutual Cirilium portfolios range, the investment proposition managed by Old Mutual Global Investors that sits at the heart of the Intrinsic restricted advice proposition, delivered NCCF of £0.7 billion, taking FUM to £2.6 billion.

Products – UK Platform

Q3 2015 gross sales for the UK Platform of £1.6 billion reflect the strongest quarter of the year, bringing year-to-date gross sales to £4.6 billion primarily driven by pension sales as the UK Platform continues to benefit from the pension freedoms. The UK Platform delivered a 71% increase in pension sales compared with Q3 2014. NCCF for the UK Platform overall was up 60% to £0.8 billion in Q3 2015 (Q3 2014: £0.5 billion), with year-to-date net flows 43% higher at £2.0 billion (2014: £1.4 billion). In Q3 2015, the business launched ‘IncomeSelect’, bringing together the multi-asset portfolios of the Old Mutual Generation range with a new income planning tool, to complement the flexible drawdown facility of the Collective Retirement Account.

Products – Old Mutual International

Q3 2015 gross sales for Old Mutual International, the cross-border business of Old Mutual Wealth, were up 29% at £0.6 billion (Q3 2014: £0.4 billion), boosted by a strong quarter in both Latin America and Singapore. Q3 2015 NCCF was £0.2 billion, bringing year-to-date NCCF to £0.5 billion. Old Mutual International’s FUM stood at £15.5 billion at the end of September 2015.

The development of a high net worth proposition is now coming to fruition, with both the Silk Life Plan in Asia and Life Investment Portfolio in Latin America attracting larger cases. In recognition of the growth of this new stream of sizeable business, a high net worth team has been launched in the service centre based in the Isle of Man.

Products – Old Mutual Wealth Italy & Europe

Year-to-date NCCF for Old Mutual Wealth Italy was higher than the previous year at £0.5 billion (2014: £0.3 billion), boosted by the expansion of our distribution agreement with a major bank. Q3 2015 represented a slower quarter for Italy compared with Q1 and Q2 due to the traditionally quieter holiday period, with NCCF of £0.1 billion. 

Old Mutual Wealth completed the sale of its Swiss closed life business to Life Invest Holdings, a company owned by the Mutschler Group and Hannover Re on 30 September 2015.

Old Mutual Wealth data tables for the three months ended 30 September 2015

Gross sales and funds under management (£bn)

 

FUM

1-Jul-15

Gross
inflows

Gross
outflows

Net
flows

Market and
other
movements

FUM

30-Sep-15

Invest & Grow markets

94.5

5.9

(3.4)

2.5

(3.9)

93.1

UK Platform ¹

32.9

1.6

(0.8)

0.8

(1.3)

32.4

UK Other ²

6.0

0.4

(0.3)

0.1

(0.1)

6.0

International

15.9

0.5

(0.3)

0.2

(0.6)

15.5

Old Mutual Global Investors ³

22.4

2.7

(1.7)

1.0

(1.2)

22.2

Quilter Cheviot 4

17.3

0.7

(0.3)

0.4

(0.7)

17.0

Manage for Value markets

14.8

0.3

(0.4)

(0.1)

(1.2)

13.5

Europe - open book 5

4.9

0.2

(0.1)

0.1

-

5.0

Heritage business 6

9.9

0.1

(0.3)

(0.2)

(1.2)7

8.5

Elimination of intra-Group assets 8

(8.3)

(0.7)

0.6

(0.1)

0.5

(7.9)

Total Old Mutual Wealth

101.0

5.5

(3.2)

2.3

(4.6)

98.7

 

 

 

 

 

 

 

 

FUM

1-Jul-14

Gross
inflows

Gross
outflows

Net
flows

Market and
other
movements

FUM

30-Sep-14

Invest & Grow markets

66.5

3.9

(3.2)

0.7

1.8

69.0

UK Platform ¹

28.8

1.3

(0.8)

0.5

0.2

29.5

UK Other ²

5.6

0.2

(0.3)

(0.1)

0.3

5.8

International

15.1

0.4

(0.4)

-

0.2

15.3

Old Mutual Global Investors ³

17.0

2.0

(1.7)

0.3

1.1

18.4

Manage for Value markets

21.6

0.6

(0.5)

0.1

(0.5)

21.2

Europe - open book 5

6.4

0.4

(0.2)

0.2

(0.2)

6.4

Heritage business 6

15.2

0.2

(0.3)

(0.1)

(0.3)

14.8

Elimination of intra-Group assets 8

(7.8)

(0.7)

0.7

-

(0.2)

(8.0)

Total Old Mutual Wealth

80.3

3.8

(3.0)

0.8

1.1

82.2


1
UK Platform FUM excludes intra-Group assets from our International business of £1.4 billion at 30 September 2015 (30 September 2014: £1.5 billion)
2 Includes Protection, Series 6 pensions and UK Institutional business
3 OMGI FUM includes £0.1 billion of shareholder assets at 30 September 2015 (30 September 2014: £0.1 billion)
4 The acquisition of Quilter Cheviot was completed on 25 February 2015.  Market and other movements includes £17.5 billion of acquired FUM
5 Includes business written in Italy and divested business in France and Luxembourg (sold in February 2015) and Poland (sold in May 2014)
6 Includes UK Heritage and divested businesses in Switzerland (sold 30 September 2015) and in Germany, Austria and Liechtenstein (sold in Q4 2014)
7 Market and other movements in Q3 2015 includes £0.8 billion of disposed FUM from the Switzerland business (sold 30 September 2015)
8 The elimination represents the removal of double-counting of assets and flows managed by OMGI on behalf of other Old Mutual Wealth businesses.  In Q3 2014 year-to-date, there was £0.3 billion of seeding of the Foundation fund range

Old Mutual Wealth data tables for the nine months ended 30 September 2015

Gross sales and funds under management (£bn)

 

FUM

1-Jan-15

Gross
i
nflows

Gross
o
utflows

Net
flows

Market and
other
movements

FUM

30-Sep-15

Invest & Grow markets

73.4

16.3

(11.1)

5.2

14.5

93.1

UK Platform ¹

30.8

4.6

(2.6)

2.0

(0.4)

32.4

UK Other ²

6.0

0.8

(0.8)

-

-

6.0

International

15.6

1.6

(1.1)

0.5

(0.6)

15.5

Old Mutual Global Investors ³

21.0

7.8

(5.8)

2.0

(0.8)

22.2

Quilter Cheviot 4

-

1.5

(0.8)

0.7

16.3

17.0

Manage for Value markets

17.1

1.1

(1.4)

(0.3)

(3.3)

13.5

Europe - open book 5

6.7

0.9

(0.4)

0.5

(2.2)6

 

5.0

Heritage business 7

10.4

0.2

(1.0)

(0.8)

(1.1)8

8.5

Elimination of intra-Group assets 9

(8.0)

(2.1)

1.8

(0.3)

0.4

(7.9)

Total Old Mutual Wealth

82.5

15.3

(10.7)

4.6

11.6

98.7

 

 

 

 

 

 

 

 

FUM

1-Jan-14

Gross
inflows

Gross
outflows

Net
flows

Market and
other
movements

FUM

30-Sep-14

Invest & Grow markets

63.9

12.2

(9.4)

2.8

2.3

69.0

UK Platform ¹

27.3

3.8

(2.4)

1.4

0.8

29.5

UK Other ²

5.6

0.5

(0.6)

(0.1)

0.3

5.8

International

15.0

1.4

(1.3)

0.1

0.2

15.3

Old Mutual Global Investors ³

16.0

6.5

(5.1)

1.4

1.0

18.4

Manage for Value markets

22.0

1.6

(1.9)

(0.3)

(0.5)

21.2

Europe - open book 5

6.6

1.1

(0.7)

0.4

(0.6)

6.4

Heritage business 7

15.4

0.5

(1.2)

(0.7)

0.1

14.8

Elimination of intra-Group assets 9

(7.4)

(2.3)

1.8

(0.5)

(0.1)

(8.0)

Total Old Mutual Wealth

78.5

11.5

(9.5)

2.0

1.7

82.2


1
UK Platform FUM excludes intra-Group assets from our International business of £1.4 billion at 30 September 2015 (30 September 2014: £1.5 billion)
2 Includes Protection, Series 6 pensions and UK Institutional business 
3 OMGI FUM includes £0.1 billion of shareholder assets at 30 September 2015 (30 September 2014: £0.1 billion)
4 The acquisition of Quilter Cheviot was completed on 25 February 2015.  Market and other movements includes £17.5 billion of acquired FUM
5 Includes business written in Italy and divested business in France and Luxembourg (sold in February 2015) and Poland (sold in May 2014)
6 Market and other movements include £1.9 billion of disposed FUM, following the sale of the France and Luxembourg businesses (sold in February 2015)
7 Includes UK Heritage and divested businesses in Switzerland (sold 30 September 2015) and in Germany, Austria and Liechtenstein (sold in Q4 2014)
8 Market and other movements include £0.8 billion of disposed FUM, following the sale of the Switzerland business (sold 30 September 2015)
8 The elimination represents the removal of double-counting of assets and flows managed by OMGI on behalf of other Old Mutual Wealth businesses. In Q3 2014 year-to-date, there was £0.3 billion of seeding of the Foundation fund range.

Media Contacts:

Tim Skelton-Smith
M: 07824 145076
T:  02380 916998

Vee Montebello
M: 07872 665149
T:  020 7332 7687

Notes to editors:

Quilter is a leading wealth management business in the UK and internationally, helping to create prosperity for the generations of today and tomorrow.

On a ‘go forward basis’, Quilter oversees £ 111.6 billion in customer investments (as at 31 March 2018).

It has an adviser and customer offering spanning: financial advice; investment platforms; multi-asset and single strategy investment solutions; and discretionary fund management.

The business is comprised of two segments: Wealth Platforms and Advice and Wealth Management.

Wealth Platforms includes the Old Mutual Wealth UK Platform; Old Mutual International, including AAM Advisory in Singapore; and the Old Mutual Wealth Heritage life assurance business.

Advice and Wealth Management encompasses the financial planning network, Intrinsic; Old Mutual Wealth Private Client Advisers; discretionary fund management business, Quilter Cheviot; and Old Mutual Wealth’s multi-asset investment solutions business.

The Quilter businesses will be re-branded to Quilter over a period of approximately two years following separation from Old Mutual:

  • Intrinsic to Quilter Financial Planning
  • Private Client Advisers to Quilter Private Client Advisers
  • The Multi-Asset business to Quilter Investors
  • The UK Platform to Quilter Wealth Solutions
  • The International business to become Quilter International
  • The Heritage life assurance business to Quilter Life Assurance
  • Quilter Cheviot will retain its name.

On 19 December 2017, Old Mutual Wealth announced that it has agreed to sell its Single Strategy asset management business to the Single Strategy Management team and funds managed by TA Associates. The proposed transaction is subject to customary closing conditions, including regulatory approvals. 

Quilter is part of Old Mutual plc, a FTSE 100 group that provides investment, savings, insurance and banking. For the year ended 31 December 2017, Old Mutual reported an adjusted operating profit before tax of £2.0 billion. For further information on Old Mutual plc and the underlying businesses, please visit the corporate website at www.oldmutualplc.com.

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