Standard Life sales leap but miss forecast

PENSIONS specialist Standard Life managed to protect its assets from the slump in financial markets since July but said yesterday that inflows of capital and sales had missed expectations in the past nine months.

New business sales increased by ten per cent to £15.5bn, below expectations for a 13-15 per cent gain, as Standard Life struggled to convince cautious company pension schemes to move to its management in rapidly-changing markets.

It said inflows of savings funds were hurt by the tough backdrop, though, as flows into its life and pension division fell six per cent to £3.3bn, far below expectations.

Chief financial officer Jackie Hunt said the slowdown in fund flows “does not go to the heart of our business model”.

“When market conditions are very volatile, pension trustees tend not to move their schemes as they don’t want to take the risk,” she told City A.M. “We saw slowing flows but we think we are still outperforming the market.”

Net flows into Standard Life’s UK business across all personal and corporate savings products also fell by almost a fifth compared to the first nine months of 2010, to £1.8bn, with the institutional pensions division bearing the biggest falls.

But its assets under administration lost less than three per cent of their value to reach £191.1bn and its fund management business Standard Life Investments was also only about 3.5 per cent down in value since June.

Analysts said the fall-off in corporate pension activity was understandable but could pose problems as Standard Life has made the area the cornerstone of its strategy for future growth.