Skandia UK has reported an 18% decline in life sales and a 27% fall in retail unit trust sales in Q1 this year.
In its interim management statement released this morning, Skandia UK revealed Q1 life sales dipped to £158m (APE basis) for the first quarter, mainly attributed to lower offshore portfolio bond sales through the UK.
The investment management business also suffered, with retail unit trust sales falling to £415m in Q1. Skandia UK says the whole industry struggled as volatile markets led to a “weak” ISA season.
Skandia UK attracted positive net client cash flows of £546m for the period, but adverse market movements led to a 6% decrease in funds under management – to £39.5bn.
The shift away from life bonds led to the value of new business falling to £14.5m, with a new business margin of 9.1%.
“For some clients, advisors are therefore more hesitant to recommend a bond when a direct investment in funds may be more tax-efficient,” the statement reads.
While retail sales declined, the £107m in institutional mutual fund business was “significantly” ahead of the corresponding period last year, Skandia UK says.
“Skandia Investment Management Limited's range had a good quarter during a very difficult period for markets,” it says.
“The level of volatility has resulted in good relative performance from the risk controlled range of funds as the more defensive oriented managers have had the opportunity to deliver after such a long bull market.”
Skandia UK also says it supports the FSA's revised Retail Distribution Review proposals “in most aspects”.IFAonline
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