SLA says LBG cannot rely on a right to terminate its agreement with them on grounds of competition between the two entities because, it argues, they are not in material competition with each other.
LBG says it is ‘not credible’ to suggest the two organisations are not in competition with each other.
The matter has now been handed over to the dispute resolution process set out in the original asset management arrangement.
On 15 February 2018 SLA announced that LBG and Scottish Widows had sent a notice on terminating the long-term asset management arrangements between them. SLA’s annual revenue from the deal is around £129m, representing around 4.4 per cent of its FY 2017 pro forma revenue.
SLA says that it does not agree that, following the merger of Aberdeen Asset Management and Standard Life, SLA is in material competition in the UK with LBG.
A spokesperson for LBG says: “We note and are disappointed by the comments made by Standard Life Aberdeen, particularly in the light of our position as a major customer.
“Standard Life Aberdeen is a clear and material competitor of Scottish Widows and Lloyds Banking Group in the UK and to suggest otherwise is not credible.
“As a result, Scottish Widows and Lloyds Banking Group had the right to terminate the contracts with Standard Life Aberdeen and we acted accordingly by serving notice on February 14.In any event, management of the funds in question would have ended formally under the terms of the contracts in March 2022.
“We are confident of our legal position and that our actions are in the best interests of our customers, and we are therefore surprised at the course of action pursued by Standard Life Aberdeen.”
