Fund manager and wealth manager M&G has reported a £21.1bn drop in assets under management and administration to £348.9bn for the first half of 2022.

The firm saw net client inflows (excluding Heritage) of £1.2bn.

It said the drop in assets was mainly driven by adverse market movements and cautioned that ongoing economic uncertainty had the potential to disrupt markets further and impact results.

Adjusted operating profit before tax fell 44% to £182m for the half (H1 2021: £327m), with the firm attributing the drop to current market conditions.

M&G Wealth, the fund manager’s wealth management and advice division, saw improved net client flows.

Gross inflows into PruFund increased to £2.5bn (H1 2021: £1.9bn) following a strong investment performance, and digitisation with PruFund being launched on the M&G Wealth platform.

M&G Wealth is part of M&G plc and has four main parts, M&G Wealth Advice, M&G Wealth Platform, M&G Wealth Investments and a retail investment funds business, M&G Direct.

The fund manager and wealth manager said that it now believes M&G Wealth has all the building blocks required to become a major player in the UK wealth market.

John Foley, chief executive at M&G, said: “Our continued investment in M&G Wealth positions it to become a major player in the UK wealth market. In addition to recently announcing an agreement to acquire Continuum Financial Services, M&G Wealth has also launched PruFund Planet on its digital platform, the first time that PruFund has been offered as a choice on any investment platform in the UK.”

M&G Wealth has acquired a number of businesses since being launched in September 2020 with the mission to tackle the 'advice gap' by increasing its scale and services.

In late 2021, M&G Wealth launched a hybrid advice business called ‘MAP your future’ initially to clients with more modest wealth.  At the start of 2022 M&G plc also completed the acquisition of Financial Planner Sandringham Partners to form an independent financial advice arm of M&G Wealth. This year it has also announced a partnership agreement with robo adviser Moneyfarm.

Earlier this month M&G finalized a deal to acquire national IFA firm Continuum. Under the deal Continuum will retain its own brand as part of the M&G Wealth business.

M&G Wealth plans to increase its number of advisers to around 1,000 over the next 5 years. Following the acquisition of Continuum, M&G Wealth’s total number of advisers across its hybrid, restricted and independent businesses will be around 500.