ClearView FUM dips but outlook positive
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Samantha Hodge is a journalist with InvestorDaily, a Morningstar publication.
Listed financial services firm ClearView Wealth (CVW) suffered a dip in funds under management (FUM) in the 2012 financial year.
However, the business outlook is positive, with a key focus on growth in the life and wealth businesses.
"We are pleased with this result as it was clearly achieved in a very difficult trading environment, particularly for our wealth management operation and at a time when we have invested both substantial time and money in developing a new platform," ClearView Wealth managing director Simon Swanson said.
ClearView Wealth cited weak capital market conditions and lack of inflows (WealthSolutions launched in December 2012) for the 8.9 per cent FUM drop to $1.38 billion in 2012.
"The decline in FUM reflects market conditions and sentiment. There has been a general deferral of retirement plans which has disproportionally impacted us due to the historic skew to the retiree market," Swanson said.
"Long-term industry fundamentals are nevertheless very sound. The increase in the superannuation guarantee from 9 to 12 per cent will help drive growth."
The group achieved an increase of 158 per cent in net profit after tax (NPAT) to $22.3 million for the 12 months ended 30 June.
The firm recorded a steady result for underlying NPAT, a measure used to determine the size of dividends, including items such as amortisation of $19.2 million. Underlying NPAT was down 0.4 per cent from 2011.
ClearView highlighted growth plans for its life and wealth businesses in the 2013 financial year by building on LifeSolutions, recruiting more advisers, establishing more distribution agreements with independent financial advisers and rolling out WealthSolutions.
"It is well recognised that in Australia the life insurance and wealth management sectors enjoy strong long-term growth potential due to underinsurance and the forthcoming increase in mandated superannuation contributions," Swanson said.
"Although shifting market conditions can at times be challenging, they will not alter the basic long-term growth trajectory of these sectors."