The circular set out plans for SLA and Phoenix to work together to maintain and develop workplace propositions under the Standard Life brand. Phoenix will maintain the Stanplan master trust.
It also confirmed that SLA would also get the right of first refusal for all investment management mandates on new assets that Phoenix acquires in the future under the deal, which sees the proposed sale of Standard Life Assurance Limited to Phoenix for £3.28 billion, made up of £2.28bn cash and a 19.99 stake in theenlarged Phoenix Group. SLA will also potentially manage more of Phoenix’s existing investment mandates with £7bn already under review and the potential for additional mandates.
The circular says SLA’s revised operating model will deliver at least £100m of annual net efficiency savings by the end of 2020 in addition to previously announced cost synergies of £250m per annum
The statement says there is ‘opportunity to offer relevant propositions and services, including advice, to the Enlarged Phoenix Group’s c.10 million customers’.
SLA chairman Sir Gerry Grimstone says: “The Retained Group and the Enlarged Phoenix Group will work together to offer market-leading solutions to workplace pension clients. Each group will be responsible for different aspects of the workplace business, with the Retained Group providing investment management, brand and marketing services, and the Enlarged Phoenix Group focusing on design and development, policy administration and operational support. The operating model for the workplace business will otherwise remain unchanged and staff currently supporting this business will continue to work together post-Completion.
“A joint operating forum will be established and will be responsible for decision making which together with a supporting wider governance framework will facilitate an effective partnership. We remain fully committed to our workplace clients, and will work together with the Phoenix Group, including through the joint operating forum, to minimise disruption to the service that they receive. We are determined that workplace clients and their respective employees should continue to enjoy a best-in-class service.
“As mentioned above, enhancing its access to Retail customers by bringing to bear its full suite of investment management and financial advice capabilities is a priority for Standard Life Aberdeen. The strategic partnership with the Phoenix Group provides an opportunity for Standard Life Aberdeen to offer relevant products and services to the Enlarged Phoenix Group’s c.10 million customers (wherever permissible under applicable law and contractual arrangements, and subject to the receipt of customer consent where required). This includes, for example, offering financial advice services to non-advised customers through 1825 and the development of our direct-to-consumer capabilities for the Enlarged Phoenix Group customers.
“The Retail Platforms will continue to be part of Standard Life Aberdeen. The Wrap SIPP, Wrap Onshore Bond and Wrap International Portfolio Bond will be provided by the Enlarged Phoenix Group. The Wrap ISA, Wrap Personal Portfolio and Wrap Cash Account wrappers will continue to be provided by the Retained Group. The teams responsible for developing the Wrap platform will remain with Standard Life Aberdeen and it is our intention that the Client Service and Proposition Agreement should ensure that there is no break in continuity or reduction in service standards for the customers of the Wrap platform.
“Standard Life Aberdeen continues to grow 1825, which offers a full financial planning and personal tax advice service though its 78 investment professionals operating out of 11 cities across the UK. Offering a wide range of investment options, supported by investment experts and technology, clients are able to access support how and when they need it.
“In addition to enhancing the investment management relationships that Aberdeen Standard Investments has with UK Wholesale customers such as private banks and third party investment platforms, our strategy is to focus on retail propositions making use of Standard Life Aberdeen’s electronic platforms, financial advice and investment solutions to serve independent financial advisers as well as advised and non-advised customers.”