M&G has confirmed it will exit the platform market as part of its simplification plans, it said in its half-year results today (4 September).
In May 2020, M&G announced plans to buy Royal London’s Ascentric platform. It was rebranded to M&G Wealth in March 2021.
In its results, the business said its platform and advice businesses had made losses of £9m, compared with £19m the previous year.
It put the decrease down to lower costs across the business following the delivery of initiatives that are part of its transformation programme and the impact of the impairment of an intangible asset in 2023.
It spent £4m on the development of the M&G Wealth platform business in the half-year to June 2024.
The business also confirmed its wealth business will be “more closely aligned” to the life business.
“We are simplifying our operating model by bringing together wealth and life under the leadership of Clive Bolton,” it said in its results.
“Through these changes, we remain committed to the UK retail market, which offers a compelling growth opportunity for M&G.
“This will allow us to concentrate our resources, complementing PruFund with the life insurance solutions that our clients want, reduce duplication and improve operational efficiency.
“Underpinning these decisions is our ongoing drive to deliver improved client outcomes.”
Overall, M&G reported adjusted operating profit before tax of £375m – nearly matching last year’s “record” result.
Asset management profits are up 9% year-on-year and its cost-to-income ratio has reduced to 77% in six months (from 79% at FY).
Maybe M&G’s new client improvement unit can look into easier escape routes from their funds and charges?
This is important as, if as expected, ‘no class traitor’ Reeves raises CGT, this means, potentially at least, more will stay put for longer…
This also helps, somewhat oddly, the life sector as changes in fund providers does not trigger a sale…
All this means the charges levied by fund managers -who have a God given right to huge wealth and exclusivity with OPM mind – can be less competitive as the incentive to bear down on same reduces.
This is not going to be the first platform exit. There are too many and there needs to be rationalisation. There will be the DIY platforms and as for the others they need to get back to their knitting. A plain and simple utility for advisers without all the hand holding (ready made portfolios etc). If advisers can’t construct their own portfolios they shouldn’t be in the investment field.
iNDEED!!
This is not going to be the first platform exit – or the last. (My omission)
So… Ascentric /M&G platform up for sale again?