Phoenix Group Holdings, which last year acquired Standard Life Assurance taking on thousands of staff in Scotland, has revealed that some £32 million of its client money is trapped in Neil Woodford’s suspended fund.
Europe’s largest owner of life assurance funds closed to new customers said that about 2,000 customers have been affected by the affair, which has seen the flagship Woodford equity income fund suspended since early June.
Chief executive Clive Bannister stressed that the impact for Phoenix was the “thinnest end of the wedge”, given that the firm has more than ten million customers.
But he added: “The insurance industry has a 250-year-old reputation of looking after people’s money… and one doesn’t want to see that diminished.”
Phoenix posted a 50 per cent rise in half-year operating profits to £325 million. However, it also saw UK gross money inflows drop to £4.8 billion in the six months to June, from £5.5bn a year earlier.
Under the deal between the group and Standard Life Aberdeen some 3,500 employees moved to Phoenix – about 2,900 of them based in Scotland.
Bannister added: “The life insurance sector continues to consolidate and the M&A pipeline remains strong. We are ready to do deals that meet our acquisition criteria and I am confident that Phoenix will continue to be the market leader in this consolidation process.”
An interim dividend of 23.4p per share is expected to be paid on 30 September.