M&G said the losses were driven by an increase in costs owing to inflation and a one-off intangible asset write-off in the first half of 2023 of £7m, according to its annual report released this morning.

Adjusted profit for the wealth arm was offset by a strong performance from its PruFund business, with the division reporting a £22m increase in adjusted operating profit before tax to £180m.

Andrea Rossi, group CEO of M&G, said: “Throughout 2023 we continued to see strong demand for our key propositions from our wealth clients with PruFund Wealth sales increasing by 17%, reaching the highest level since 2019.

“We see significant opportunities to grow our wealth business over the coming years with over 12 million people in the UK currently seeking assistance to achieve financial security. Clients want accessible advice, help in planning for life events, and a diversified multi-asset exposure that can reduce the volatility of their investments.

“By focusing on expanding our advice capabilities through our in-house Advice Training Academy and leveraging other multi-asset solutions to capitalise on growth opportunities, we expect to improve efficiency, client delivery, and financial outcomes in 2024 and beyond.”

Overall, M&G’s wealth division saw net client inflows remain steady at £0.2bn (2022: £0.2bn).

Wealth AUMA increased to £87.1bn (2022: £83.4bn) driven by positive market and other movements of £3.5bn.

As a whole, in 2023 M&G saw £1.1bn in net client inflows, an improvement on the £0.2bn reported in 2022.

Adjusted operating profit before tax also rose 28% from £625m in 2022 to £797m in 2023.

M&G has been changing its operating model in order to cut costs by £200m by 2025 (from 2022). So far £73m in savings have been achieved, according to the annual report.

Mr Rossi said M&G had made “good momentum” in the first year of its transformation programme, “creating a leaner and more efficient organisation and improving our ability to serve clients, reduce costs and unlock growth.”

Some of the savings were made through a voluntary redundancy programme, alongside reducing its UK office spend by 15%.