Ignis takeover drives SLI’s asset rise

Flows into SLI’s multi-asset products were also up during the first half of the year as the firm delivered a 51 per cent increase in pre-tax operating profits, from £102 million to £154 million.

As well as the acquisition of Ignis, the investment arm of insurance giant Standard Life also cited “strong net inflows into higher margin products including UK mutual funds and multi-asset investment solutions” as reason for the positive results.

David Nish, chief executive of Standard Life, which reported a 15 per cent drop in pre-tax operating profits in its UK division in the first half of the year as the pension freedoms continue to take their toll on annuity business, said: “Our UK fee-based propositions continue to build momentum with regular contributions into our workplace pensions up 15 per cent.

“The strength of these propositions, investment solutions and our market positioning means we have been able to help our customers with the new pensions regulations and continue to support them as saving for their futures becomes increasingly front of mind.”

Assets on SLI’s firm’s wrap platform were up 11 per cent, from £20.9bn at the end of 2014 to £23.3 billion at the halfway point in 2015, while the number of adviser firms using the proposition increased from 1,340 to 1,405.

The insurer’s results for the first six months of 2015 reveal year-on-year profits in the UK business dropped from £165 million in the first half of 2014 to £141 million this year.

This was driven by a £37 million fall in the spread/risk margin, from £75 million to £38 million, “due to lower annuity sales and reduced benefit from asset liability management”.

The spread/risk margin is a measure of the profit from annuity business.

Some of this money appears to be flowing to the firm’s drawdown products in the wake of Chancellor George Osborne’s radical retirement overhaul in April, with drawdown assets under administration up 12 per cent, from £11.5 billion at the end of 2014 to £12.9bn at the end of H1 2015.

Standard Life’s recently launched non-advised drawdown offering has so far attracted £140 million of assets, the majority of which are managed by Standard Life Investments.

Fee-based revenue rose marginally year-on-year, from £303 million to £314 million, while UK new fee net inflows increase 21 per cent, from £1.5 billion to £1.8 billion.

Total UK assets under administration were up 2 per cent year-on-year, from £20.9 billion to £23.3 billion.

Mr Nish, who will be replaced by SLI boss Keith Skeoch next month, said: “It has been an absolute privilege to lead Standard Life for the last six years and to help build our business into the strong global player it is today,”

He added: “I wish Keith and the inspirational people across all of our group every success for the future. Standard Life is very well positioned to deliver ongoing growth and to help our customers and clients to save and invest, so that they can look forward to their financial futures with confidence.”