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Standard Life has reported UK pre-tax operating profits up 14% in the first half, driven by lower commission costs as IFAs switch to fee-charging.
UK pre-tax operating profits rose to £87m in the six months to June, up from £76m for the same period in 2010.
"Our focus on those IFAs who are best placed to prosper in the new market environment we are entering, and developing solutions for both them and their clients, has allowed us to grow our intermediary market share without incurring the cost of commission on new business," the insurer said.
Group-wide, Standard Life increased pre-tax profits by 44% to £262m in H1, up from £182m a year earlier. Assets under administration at the group reached the £200bn barrier.
UK new business sales were up 19% to £8bn, and fee business AUA grew by 3% to £102bn. Standard Life said the rise in AUA reflected continued good flows as well as positive market movements.
Standard Life said assets on its platforms is approaching the £11bn mark, with the number of adviser firms using the Standard Life wrap up from 727 to 926 with an average £8.2m per firm, up from £6.1m in 2010.
The insurer said it had delivered £30m of efficiency savings over the period and would seek to take more cost-cutting measures.
It also announced an interim dividend of 4.6p per share, up from 4.35p last year.
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| Comment | Fee-charging IFAs help boost Standard Life UK profits |
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Fee charging IFA's boost Standard Life Profits
Well, well, well Are we surprised, the IFA's who take all the responsibility get less as the life offices get richer, this is a taste of RDR, I wonder how many top FSA people will acquire seats on the board of life offices, and of course not forgetting the ABI, they'll love this.
Posted by: Cliff Linsdell IFA
Fee Charging IFAs & Standard Life
Not surprising. My colleagues and I predicted this would happen. Standard Life and all the other insurance companies and asset management companies can't wait for us all to become fee charging. It will work wonders for their bottom lines but the consumer will get nothing and will be conned into dealing direct. Of course the FSA missed this trick like they have with most of those the large company brigade have pulled for years. God help the general consuming public when they start going direct again. Only this morning I read a Pru ad looking to recruit qualified direct sales people.
Posted by: John Smyth
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Same old song
This is exactly as I feared. This should not be the case. If commission is not paid then this should be reflected pari passu in the product. Obviously judging from this article it is not the case at Standard Life. They are obviously pocketing money that should in theory belong to the client. No doubt it will take the Regulator 5 years to cotton on as they are too busy fiddling about with footling detail while the big picture as ever passes them by.
Posted by: Harry Katz