Industrial Alliance Insurance and Financial Services Inc. today reported a 46% rise in second quarter profit, due to strong sales in its individual wealth management business and a lower tax rate.

The insurer and investment manager said net income in the quarter was $65.1 million, or 78¢ a share, compared with $44.5 million, or 56¢ a share, in the corresponding quarter a year earlier.

The company also raised its quarterly dividend to 16¢ a share, from 14¢.

Its latest quarter included a $16.5 million tax-related gain, of which $11.5 million, or 14¢ a share, was non-recurring and attributable to a lower federal tax rate on future tax liability.

The effective tax rate for the second quarter was 25.3%, down from 30.3% a year earlier. The company said it expects a 29% effective tax rate in future.

Premiums and deposits soared to $1.3 billion, up 56% from a year earlier, due to the addition of the Clarington Corp. mutual fund business, the company said. Industrial Alliance acquired Clarington in late 2005.

The firm has expanded from insurance into wealth management in recent years, and wealth-management sales strengthened in the second quarter despite the stock market downturn.

But the equity market decline slowed asset growth. Assets under management were $27 billion at the end of June, unchanged from the first quarter, while assets under administration were $12.7 billion, down from $13.1 billion at the end of March.

The company said annualized return-on-equity was 18.3% in the latest quarter, against 14% a year earlier.