Old Mutual Wealth platform upgrade costs soar to £250m

Old Mutual Wealth has seen the cost of migrating its platform to IFDS soar from the £160m originally budgeted to £250m.

Its half-year results, published today, reveal the project to outsource its platform admin and technology to IFDS as part of a 20-year deal is costing an extra £50m more than expected.

Old Mutual Wealth has also spent a further £40m building an “improved customer interface”, which the company says will the platform’s scope.

The company says it is roughly halfway through the migration, with new system now expected to go live at the start of 2017.

Platform assets under management on the platform rose from £28.8bn to £32.9bn, while platform profits rose 30 per cent from £10m to £13m.

Old Mutual Wealth expects to pick up an additional 220 new wealth advisers as a result of its partnership with Sesame Bankhall Group following the latter’s decision to close its investment advice advice.

Old Mutual currently has 988 advisers in its restricted network, with that number now expected to top 1,200 by the end of the year.

Intrinsic advisers once also boosted Old Mutual’s platform sales in the first half, with net flows on its platform rising 33 per cent from £900m to £1.2bn this year, with 24 per cent of the increase generated by Intrinsic advisers.

Overall profits climbed by just over a quarter for the first six months of 2015.

The firm recorded pre-tax adjusted operating profits of £151m, up by 26 per cent on 2014’s equivalent figure of £120m.

Old Mutual Wealth chief executive Paul Feeney says the firm is benefiting from offering a range of services to advisers in a single place.

He says: “Advisers will decide how much of the integrated proposition to use for each client but by offering it all in one place we can do so at very good value for advisers and their clients and underpin it with first class service.

“These results are starting to show that strategy gaining significant traction in the market.”