Royal Liver is planning to launch a range of multi-manager investment funds early in 2008.
The mutual says it will offer a broad range of risk-adjusted funds which will be available through the IFA sector.
The funds will be outsourced to external fund managers and will be run on a manager of managers basis. However, Royal Liver will play an active role in overseeing the funds. Royal Liver is currently running multi-manager funds internally using members’ money but the first roll out to the wider market will come in the new year.
The group also announced its strongest first half results for five years driven by a change in strategy.
Three years ago, Royal Liver decided to stop manufacturing traditional products such as with-profits which had fallen out of favour and focus on protection products. Its protection brand Progress and Caledonian performed strongly in H1 delivering a surplus of income over expenses for the first time in the last five years.
Steve Burnett, Royal Liver chief executive, says: “We cut down from trying to do everything to a focus on protection products in the UK and Ireland. The proposition is attractive to a certain type of IFA as it is technology based with very rapid underwriting.”
He added the group was keen in the future to introduce new protection products alongside the existing range.
Royal Liver also decided it would deliver face to face advice with the acquisition of National IFA firm Park Row in 2003.
Burnett comments: “The change in strategy is not what you would expect from a mutual. Five years ago we had a direct sales force but that was difficult to run economically and we moved into the IFA market by acquiring Park Row and moving into the IFA sector where we are now middle of the market.”
However, Park Row is one part of the business which is not on track or ahead of budget.
Burnett says: “In line with most other UK National IFA distribution businesses, this has been a challenging year to date for Park Row. Regulatory reviews and the ever increasing cost of compliance are having a huge impact in the IFA distribution sector.
“Park Row also experienced increased central costs following the integration of the managed sales force in the second quarter of 2006. Park Row is going through a period of restructuring and investment which will position the business strongly for the future and I am confident that the management team will return the business to profit during the next few years.”
As part of its three year strategy, Royal Liver also planned to improve its financial performance with good progress made in the first half with operating expenses down 27% on 2006.
During the first half of the year, Royal Liver entered into talks with Royal London about a possible merger of the groups but Burnett says a line has now firmly been drawn under the negotiations.
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