Investment and wealth manager M&G is to exit the digital platform market and will merge its life and wealth divisions in a major shake up for the company.

The moves will allow the firm to focus more on expanding its wealth management arm, it said.

The firm confirmed the changes in its half year results out today which saw net client outflows of £1.5bn and adjusted operating profit down from £390m last year to £375m this year.

The company said the platform changes were part of a “simplification” process to focus the company on further growth in the wealth market.

The firm said it had migrated nearly 80% of Heritage policies onto a single platform solution resulting in cost savings of £121m in the first 18 months of its efficiency programme.

M&G said as part of the process it had undertaken a strategic review of its wealth business.

The review concluded that its competitive position in the wealth market, “is not sufficiently strong to ensure profitable growth without committing significant further resources."

Because of this it will “focus and rationalise its wealth strategy” to target continuing to grow the distribution of its own solutions, including PruFund, through its restricted advice channel and independent advisers. 

It will also make its propositions more accessible on third party platforms, it said.

In a statement the firm said: “We will exit our adviser digital platform as of part focusing the business. We have also decided that wealth should be more closely aligned to our Life business and we are simplifying our operating model by bringing together Wealth and Life under the leadership of Clive Bolton.

“Through these changes, we remain committed to the UK retail market, which offers a compelling growth opportunity for M&G. This will allow us to concentrate our resources, complementing PruFund with the life insurance solutions that our clients want, reduce duplication and improve operational efficiency. Underpinning these decisions is our ongoing drive to deliver improved client outcomes.”

Andrea Rossi, group chief executive, said: “Over the last 18 months, we have made meaningful progress transforming M&G by focusing on our strategic priorities: Financial Strength, Simplification, and Growth. Against the backdrop of a challenging market environment in the first half of the year, we have delivered another resilient financial performance with Adjusted Operating Profit and Capital Generation nearly matching last year's excellent results.

"We have materially improved the Financial Strength of the business lifting our shareholder Solvency II coverage ratio to 210%, a very strong position.  And we tackled our leverage too, reducing debt by £461 million.

"Our Simplification agenda continues at pace, delivering £121 million in cost savings so far.  We have made considerable progress across all of our financial targets and, reflecting our track record of delivery and our commitment to strong shareholder outcomes, we are announcing today upgrades to our capital generation and cost savings targets.

"We are continuing to push further on our strategic priorities, combining our Life and Wealth operations to support the acceleration of our growth plan in the UK retail market. We also see growth opportunities in our international footprint and in the broadening of our product offering. As we look ahead, the strong foundations we have built give me confidence in the long-term outlook for M&G."