The business, which is currently in the midst of a takeover by finance giant Bank of Montreal, said assets under management fell 14 per cent after its insurance clients pulled £20.3bn over the year.
“While 2013 has been a year of progress, we also acknowledge the financial headwinds that still face our business,” chief executive Richard Wilson said.
F&C has four large cornerstone investors which now account for half of all F&C’s assets under management and about a third of its revenues.
These investors, dubbed strategic partners, pulled £20.3bn last year in total, shrinking F&C’s revenues by £24.3m.
Overall the business reported a £1.3bn inflow over the year, giving the firm a total outflow of cash of £19bn.
Pre-tax profits rose to £69.2m from £51.9m after margins improved thanks to a drastic cost-cutting drive. The F&C board has recommended shareholders vote through the takeover by Bank of Montreal at 120p a share despite moves by other investors to invite rival bids.
Large shareholder Standard Life has said it is open to a rival offer, while hedge fund Elliott Capital has built up a 10 per cent stake to help drive through a higher takeover price.
F&C fell 1.53 per cent in trading yesterday but shares are still riding high in anticipation of the takeover.