UPDATE 2-Standard Life Aberdeen H1 hit by more outflows, shares fall

* Total assets 577.5 bln stg from 551.5 bln at end-Dec

* Cost cuts on track; interim dividend unchanged

* Shares down 5.8%, among biggest FTSE 100 fallers (Recasts, adds detail from statement, background, analyst quote, shares)

By Simon Jessop

LONDON, Aug 7 (Reuters) - British asset manager Standard Life Aberdeen's first-half profit missed forecasts on Wednesday as clients continued to pull money from higher-margin products, hitting fee revenue and sending its shares lower.

SLA, Britain's second-biggest standalone money manager by market capitalisation, has suffered months of outflows and while the pace of demand to exit its funds slowed, outflows still exceeded a company supplied forecast of analysts.

Net outflows stood at 15.9 billion pounds ($19.31 billion) compared to a forecast of 13.4 billion pounds, including from equity and alternative products charging higher fees.

Many of SLA's rival asset managers, such as Schroders , have been hit by outflows during the first half of the year, amid weakening investor sentiment as trade war tensions rise and Brexit uncertainty weighs.

Market gains during the period have generally helped cushion the loss of client assets, however, and SLA was no exception, seeing total assets under management and administration rise 5%, helped by investment returns of 41.2 billion pounds.

A reduction in operating expenses combined with its share of profits from Phoenix Group, which bought most of SLA's insurance business as part of a broader venture, and in which SLA retains a stake, also helped cushion the hit.

Nonetheless, adjusted pretax profit of 280 million pounds lagged analyst forecasts for 288 million pounds and by 0819 GMT SLA shares were trading down 5.8%. SLA kept its interim dividend unchanged at 7.3 pence a share.

Chief Executive Keith Skeoch said while the market backdrop was tough, the company had a good pipeline of new business across an increasingly diverse range of products.

Cost-cutting plans begun when the company was formed through the 2017 merger of insurer Standard Life and Aberdeen Asset Management were nearly two-thirds completed and on-track to achieve the expected 350 million pounds a year savings.

SLA recently settled a long-running dispute with Lloyds Banking Group over an investment mandate pulled by the lender following the merger.

Under pressure from falling fees and the higher cost of regulations, many asset managers are looking to join forces and diversify, something SLA is doing through an expansion into alternative and private assets and financial planning.

Among recent deals are plans to buy the wealth advisory unit of Grant Thornton.

"There is no denying that our industry is changing rapidly. Our scale and strong capital position has allowed us to respond proactively, and we believe we are well positioned for future growth," Skeoch said.

($1 = 0.8226 pounds) (Reporting by Simon Jessop, editing by Sinead Cruise and Alexandra Hudson)