Quilter has announced it has set aside £69m to cover customer redress following the Financial Conduct Authority’s (FCA) thematic review into the closed book life insurance sector.
In its first results as a listed company, the wealth manager adjusted pre-tax profit jumped by 16% to £110m in the first half of this year, compared to the same point of 2017. This was on a first half revenue of £385m, which is up by 11%, driven by the increase in assets.
Quilter is setting aside £69m to cover “voluntary remediation to customers in certain products” following the UK financial watchdog’s review into long-standing customers.
The investigation, launched in March 2016, was part of a review of the way six life companies treated their longstanding customers, including their use of exit fees. Old Mutual Wealth Life Assurance, now part of Quilter, was one of the firm’s included in the review.
It also announced a special interim dividend of 12p per share, returning £221m surplus proceeds from from the sale of Richard Buxton’s single strategy business, earlier this year.
The company’s £30.7bn funds arm run by Buxton was sold to TA Associates for £583m in June.
Assets under management rose by 2% over the period to £116.5bn, helped by net flows into the business of £2.2bn. It has a budget of £20m to spend on buying and growing advice firms in the coming year.
However, Quilter is “someway from demonstrating its full potential”, chief executive Paul Feeney (pictured) said in a statement. “We have built a leading wealth management business,” he noted, but there are still “significant growth opportunities” to explore.
The company will not be paying a normal interim dividend but expects to declare a final dividend for 2018. (continues…)
Quilter has appointed made two new appointments to its board.
Paul Matthews, former UK & Europe chief executive and chairman of Standard Life Wealth, has joined the board as an independent non-executive director. He will also become a non-executive director of subsidiary Intrinsic Financial Services, which is being rebranded into Quilter Financial Planning.
Matthews was at Standard Life Wealth between 1989 and 2017. Currently, he is an executive mentor at Merryck & Co.
The second hire is Suresh Kana, a South African businessman who has been working at PwC for over three decades. He was most recently chief executive officer and territory senior partner of PwC Africa.
He also serves as chairman of two Johannesburg listed companies – Imperial Holdings and Murray & Robert Holdings.