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| International Financial
Services |
| Overview |
The changes to the UK pensions’
environment created both consulting and product
opportunities for, particularly, companies with
defined benefit schemes and the trustees of those
schemes in particular, as well as high net worth
individuals.
The International Financial Services division
achieved revenue growth of 24% delivering a trading
result of £10,3 million, up 39% on the previous
year. The Actuarial Consulting division acquired
in 2002, Lane Clark & Peacock, recorded exceptional
growth in revenue and profits, benefiting from
increased demand for its services in the UK and
Swiss markets resulting from the pensions’
legislative change and significant new business
wins.
The Alexander Forbes Financial Services (which
includes the UK-based Pensions IFA (Independent
Financial Advisory) division) also recorded double-digit
revenue and profit growth with a strong sales
performance in the final quarter of the financial
year.
As previously reported, the International Financial
Services divisions were consolidated under a single
management structure in the first half of the
financial year. This includes the DC Link Administration
division, previously included as part of UK Investment
Solutions, and the continuing part of the UK Direct
Marketing operation. |
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Income from operations |
Trading results |
March
2006
£m |
% |
March
2005
£m |
March
2006
£m |
% |
March
2005
£m |
|
95,5 |
+24 |
76,8
|
10,3 |
+39 |
7,4 |
|
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| Divisional review |
| Lane Clark &
Peacock (“LCP”) |
LCP delivered strong growth
over the past year due to the high demand for
pensions’ actuarial services as companies’
and trustees began to address the issues arising
from the pensions’ legislation changes.
The shifting dynamics also potentially increased
the size of the market with a number of companies
choosing to split their corporate and trustee
advisory roles. LCP achieved significant new business
gains and was named “Actuarial Consultancy
of the Year” at the UK Professional Pensions
Awards for the second year running.
LCP Libera, a leading consulting actuarial firm
in Switzerland, produced a strong result, also
benefiting from local pensions legislation changes
and new client wins.
LCP Belgium produced a favourable result. The
business continued to have success with its “Talk”
software successfully going live in the Middle
East. |
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| Alexander Forbes
Financial Services (AFFS) |
The AFFS group continued to
perform well, despite challenges in a few specific
areas.
The Pensions IFA division had a record sales year,
although the trading result was impacted by continued
investment in the management and sales infrastructure
to lay the foundation for further growth and ensure
a continued strong compliance culture and relationship
with its regulator. The changes to the pensions’
environment reinforced the Pension IFA’s
market position providing companies and their
staff with employee benefit products and services
that optimise the employee benefit spend. A-day
provided further sales opportunities but The Annuity
Bureau suffered reduced sales due to clients deferring
decisions until after A-day. In addition, AFFS
has launched a wealth management proposition,
expanding its individual proposition to capture
the opportunities afforded by the group’s
high net worth clients. The Healthcare division
continued its recent track record of sales growth.
Alexander Forbes Trustee Services continued its
record of growth since acquisition in 2000. The
increased responsibilities on trustees offer the
business opportunities for further growth in new
appointments and trustee training services.
CTC, the UK group’s pensions-related software
provider, grew as its web-based benefits administration
system “Elements” which went live
successfully.
Alexander Forbes Channel Islands is the premier
financial services business servicing the Channel
Islands. Acquisition integration issues impacted
the year’s results but an investment in
additional management and sales resources has
already started to deliver results. Overall, AFFS
is well placed for the coming year and is investing
in additional distribution. |
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| DC Administration |
| The UK-based DC Link Administration
business, acquired in 2002, incurred a trading
loss for the year. This division trades under
both the LCP DC Link and DC Link brand names.
It continued to make inroads into the market and
grew its members under administration by 40% during
the year. Despite this, the division remains unprofitable
and strategies have been put in place to ensure
that there is growth into the future. |
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| Direct Marketing |
We have, over the past years,
highlighted that we have ceased to write new business
in Media Insurance Services Limited. This part
of the UK Direct Marketing operations which, as
previously advised, is in run-off is shown separately
from trading results from operations in the income
statement.
Alexander Forbes UK Direct, which primarily promotes
accidental death benefit policies through the
media and mailing lists recorded a small trading
loss for the year due to the testing of a new
product and certain redundancy payments. The business
continues to write new accidental death benefit
business and is expected to trade profitably in
the new financial year. |
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| International
Board |
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| 1 |
John
Robins: |
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Chairman |
| 2 |
Rael
Gordon |
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| 3 |
Mike
Hammond |
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| 4 |
Mike
Ilsley |
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| 5 |
Stewart
McCulloch |
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| 6 |
Mark
Nicholls |
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| 7 |
John
Percy-Davis |
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| 8 |
Grant
Stobart |
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