Old Mutual Wealth has reported adjusted operating profit of £104m for the first half of 2016, a slump of 31% compared to £151m a year ago.
The company said that the decline in profit was driven by operational challenges and tough markets, and a £21m charge from changes to customer fees in its Heritage book.
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The division’s IFRS pre-tax loss stood at £17m, compared to a loss of £27m in the first half of 2015.
However, net client cash flows surged 39% to £3.2bn in the first half from £2.3bn in the prior year.
Funds under management increased 7% to £112.2bn from £104.4bn a year ago.
Old Mutual’s UK financial advisory unit Intrinsic recorded increasing fund flows, accounting for a 33% rise in net client cash flows to its platform, and 26% of net client cash flows to Old Mutual Global Investor.
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By GlobalDataOld Mutual Wealth CEO Paul Feeney said: “This has been a challenging six months for Old Mutual Wealth, and the whole industry, with volatile markets dominating the first half of this year, indeed it was the worst period for net retail flows for the industry in 20 years.
“Against this backdrop, I am pleased with the resilient net client cash flow that the business delivered of £3.2 billion, up 39% on that of the prior year.”
