Consolidated gains
Within the wealth management business, Rossi says the intention is to continue to expand the Continuum Financial Services network it operates. He adds: “We are also exploring ways in which we can support selected defined benefit pension funds as their needs evolve, providing innovative insurance solutions by drawing on our investment expertise, financial scale and annuities experience.”
Rossi adds that the appeal of this business model of the advice and platform units is their ability to generate revenue that is less sensitive to market movements than the revenue from asset management.
This is something Jefferies equity analyst James Pearse, in a note seen by sister title the Financial Times, views as a positive for the company if it can be achieved.
His view is that the heritage business, being lower margin, is dragging down the valuation of the group, and if it became less proportionately reliant on the heritage business for revenue and profit, then the company's valuation could rise markedly.
M&G is one of the oldest companies in the UK market, and as it spreads its wings into other parts of the industry it is likely to become even more consequential for advisers in the years to come.
David Thorpe is investment editor at FTAdviser
