Skandia UK profits soar 56%

Strong platform sales helped boost Skandia UK's pre-tax profits for 2010 by 56% to £140m compared to £90m in 2009.

Part of the wealth management business of Old Mutual, Skandia UK's profit growth was also driven by increased funds under management and tight control on costs.

Funds under management grew 20% over the year to £33.9bn driven by a combination of strong investment growth as global stock markets recovered and high new business sales.

Gross sales grew 46% to £6bn, with over £5bn of gross inflows coming via the Skandia Investment Solutions platform. Net sales were £2.3bn, a 77% increase on 2009 (£1.3bn).

These strong sales saw Skandia UK 's market share continue to grow in Q3 2010, to 7.4% across all industry channels compared to 6.4% in Q4 2009.

Meanwhile, Old Mutual Wealth Management's cost reduction programme delivered £35m of run-rate savings and this contributed to improved profitability for Skandia UK .

The group said it is on track to be ready for the RDR well ahead of the 2013 deadline. It says it awaits the FSA's decision on platform rebates with interest and is sure it can accommodate either cash or unit rebates but "continues to understand the FSA's assertion that cash rebates could be used to disguise adviser charges".

Peter Mann, chief executive at Skandia UK , comments: "The market was evolving towards platforms naturally but the RDR will fuel that transition. As a result the growth of the platform market will hasten exponentially over the next five years and we are ideally positioned to benefit from that growth.

"It is difficult to see how some traditional product providers will compete successfully if they don't have a platform proposition so it will be interesting to see how the platform market evolves over the next 18 months. Whatever happens, our focus is clear. We will continue to deliver customer centric investment solutions and support financial advisers in building successful businesses."