Aviva PLC (LSE:AV.)’s plans to become a major player in wealth management look possibly too ambitious, according to analysts at Barclays.
In a presentation yesterday, Amanda Blanc, Aviva’s chief executive, set out a strategy to reach at least £250 billion in wealth assets and at least £280 million in operating profit per annum within the next five years.
“We consider these plans potentially achievable, but ambitious vs recent performance and in the current environment,” said analysts at the bank.
Blanc, which already has a customer base of five million, added the UK wealth market will nearly triple to £4.3 trillion in the next decade, experiencing double-digit annual growth.
Barclays suggests that to hit its targets, Aviva will need earnings to grow annually at a compound 18% (CAGR) and assets under management (AUA) by 11% against 10% forecasts for the market.
Driving this will be Aviva's Workplace operation, adds the bank.
Most of Aviva's Wealth AUA is from its Workplace operations (£93 billion of £147 billion, or 63%).
Aviva's 4.4 million Workplace customers have grown at a CAGR of 7% since 2019, across 21,000 corporate clients.
A third of those customers are under the age of 31, and a third have more than two Aviva products, suggesting an opportunity for cross- and up-selling.
Also, Workplace business tends to be long duration, with scheme retention currently above 10 years.
Shares dipped 0.7% to 406.2p.