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PruFund attracts £4.4bn flows as pension profits rise

Prudential’s PruFund has recorded net flows of £4.4 billion, marking its ninth consecutive year of positive returns for investors.

PruFund attracts £4.4bn flows as pension profits rise

PruFund inflows of £4.4 billion helped push profits up by 11% at Prudential's UK and Europe life business in the first six months of the year.

According to half year results published this morning, M&G Prudential had net inflows of £3.5 billion in its external asset management business and PruFund-related net inflows of £4.4 billion.

Prudential said its UK and Europe life business new business profit increased by 11% from £161 million in 2017 to £179 million this year. Its overall APE sales increased by 7%, with PruFund sales 7% higher. This was attributed to growth in individual pensions, up by 13%, income drawdown, up 16% and lower bond sales.

The increase in net flows led to a 12% rise in PruFund assets under management in the period to £40.3 billion. This is up from £35.9 billion as recorded at 31 December 2017.

Prudential said: 'PruFund is our market leading offering and has produced returns of up to 35% over the last few years.' 

In addition, in the three years to 30 June, M&G Prudential's retail funds generated returns in the top two upper quartiles of performance. 

Overall assets under management for the group were £342 billion, £9 billion lower than at the end of 2017 due to £12 billion of annuity liabilities reinsured to Rothesay Life, as announced in March.  

The report read: ‘It is one year since we announced the merger and transformation of M&G and Prudential UK & Europe. In that time, we have made good progress, announcing a new partnership with Tata Consulting Services to modernise our existing life portfolio, developing a combined approach to distribution and creating central service functions. M&G Prudential's investment products continue to perform well.’ 

Furthermore, Prudential stated that it has agreed with the Financial Conduct Authority to review annuities sold without advice after 1 July 2008 to its contract-based defined contribution customers.

Prudential said: ‘The review is examining whether customers were given sufficient information about their potential eligibility to purchase an enhanced annuity, either from Prudential or another pension provider.’

A gross provision of £400 million before costs incurred was established at 31 December 2017 to cover the costs of undertaking the review and any related redress. No further amount was added to this provision in the first half of 2018.

The group has also recorded a number of personnel changes with  chief executive of M&G Investments Anne Richards resigning from the role on 10 August 2018 and the appointment of Fields Wicker-Miurin as non-executive director of the Prudential renumeration committee. She will join the board on 3 Septemvber 2018. 

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1 Comments FCA: we'll visit every DB transfer adviser if we need to

FCA: we'll visit every DB transfer adviser if we need to

The Financial Conduct Authority has pledged to visit every firm offering defined benefit pension transfer advice if necessary to improve suitability levels across the market