Skandia targets cost cutting after £5.1m loss

Skandia 480

Skandia posted a £5.1m loss for the first half of the year as it plans to slash platform costs by half and move into profitability within the next three years.

In an investor presentation earlier this week, Skandia parent Old Mutual Wealth said it made a pre-tax profit of £95m for the first six months of the year. Funds under management held on the Skandia platform totalled £20.4bn.

The presentation showed the platform brought in revenue worth 52 basis points of funds under management, with platform expenses outweighing this at 57 basis points resulting in a loss of 5 basis points as a proportion of funds under management.

A Skandia spokesman says these basis points figures represent an annualised rate in order to compare against future targets. On this basis, and based on funds under management of £20.4bn, the platform made a loss of £5.1m.

The platform is predicting platforms revenues will fall to between 40 and 45 basis points of funds under management over the next three years. It is targeting a reduction in platform costs of between 25 and 30 basis points.

Based on these estimates, Skandia is targeting platform profit of approximately 15 basis points of funds under management by 2015.