London-based Quilter, Old Mutual’s former wealth management business, is the latest asset manager to record significant outflows in 2022, its results released on Wednesday show.
The group saw its assets under management and administration in 2022 shed £12.2bn to £99.6bn because of turmoil in global markets, which led to a drop in the value of assets overseen by the global asset-management industry.
The drop in assets under management could not be offset by the net inflow of £1.8bn, down more than half from the £4bn a year earlier.
The group’s profit after tax rose 13.6% year on year to £175m (R3.86bn) in its 2022 results for the year to end-December.
Asset managers worldwide struggled to grow asset pools in 2022 amid market turbulence because of the fallout from the war in Ukraine and interest-rate hikes to try to tame high inflation. As a result, equity values and bonds slumped across the world.
CEO Stevin Levin said across the industry, new business activity was hindered by “risk off” sentiment after Russia’s invasion of Ukraine in February which contributed to inflationary shocks from higher energy and food prices and cost-of-living pressures.
“This has naturally reduced the propensity for most households to save and invest beyond regular pension saving. The adviser market has been going through a period of structural change with an increasing amount of private equity capital looking to back advice consolidation vehicles,” Levin said.
“As a result, we have seen a number of smaller independent firms seeking to move their clients to these new businesses, which impacted on flows in our UK Platform which administers funds on behalf of clients of these firms.”
The group said higher inflation also meant that customers had to spend more money on discretionary items, leaving less money to save and invest.
The company recommended declaring a final dividend of 3.3 pence per share, which would increase its total dividend for the year to 4.5p. The final dividend will be discussed at Quilter’s AGM on March 18.
In other financials, the total net cash flow from operating activities plunged 45.8% to £1.68bn, and cash and cash equivalents 13.7% to £1.78bn.
Levin, who took over in November 2022, said he believed the business can do much better in future.
“This is a business with a huge amount of potential, and we are not yet delivering the growth of which we are capable. To drive improvement in our business, with customer outcomes at the core of this, my focus is on building distribution, enhancing propositions, and driving efficiency, and for these to deliver better customer outcomes and a significant increase in profitability,” he said.
Updated: March 08 2023
This article has been updated with additional information
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