Standard Life is planning to grow its adviser ranks both through developing customer service staff and by attracting external advisers from the rest of the market, according to its UK and Europe chief executive Paul Matthews.
The life and pensions provider announced earlier this month that it was launching of a wholly-owned, UK-wide financial advice business, agreeing with Skipton Building Society to buy its Pearson Jones advisory firm - home to 39 advisers and paraplanners and assets under advice of £1.1bn.
Speaking to FTAdviser, Mr Matthews said that the group is starting an academy to bring graduates into the advice industry, while existing customer service staff would help customers with the “retirement journey” and be supported if they want to take this further by working towards adviser qualifications.
Martin Tilley, Dentons’ director of technical services, proposed something similar earlier this week, suggesting that the government should allow a small sum to be withdrawn from pension pots three to five years out from retirement to pay for an advice session to discuss decumulation options.
“This would be perfect for younger advisers to cut their teeth with,” he explained.
Mr Matthews stated: “We can’t grow the academy quickly enough, so we think that many advisers out there in the market will want to join us. There will be firms that like working with us and want to come under the Standard Life brand.
“Of course I realise that many IFAs want to remain independent, but some will be thinking that going restricted under our platform is a good option.”
Standard Life currently has more than 75 qualified financial planning employees, including around 20 authorised to give advice.
The company confirmed that Pearson Jones’ advisers will go restricted with Standard Life’s platform, pointing out that its investment solutions provide access to funds from across the market, alongside a full suite of wrappers to allow for tax planning.
“The value that clients get from advice is in the financial plan, the quality of the investment solution and the ongoing monitoring and adjustment to meet their goals. The fact that a service is ‘restricted’ from a regulatory perspective has little bearing on these factors,” read a statement.
“While our advisers won’t have the ability to select esoteric investment options for their clients, we believe this is not often required and carries risks that most clients are not comfortable taking.
“Being ‘restricted’ removes a lot of unnecessary risk and complexity from the advice process, allowing our people to focus on what they do best; delivering the best possible service to their clients.”
Reiterating what his colleague, managing director Barry O’Dwyer, told FTAdviser yesterday, Mr Matthews said that while the company was in no rush to buy up other advisory firms, further acquisitions are likely to follow this year.
“There is one adviser for every 2,000 people in the UK, compared to one adviser for every 1,400 in the US,” he commented. “In our research with advisers last year they told us that the potential market for advice is huge and they need help in meeting demand, especially with the pensions reforms in April.”
Commenting on this morning’s results, Mr Matthews said that the “huge changes” in the market will mean that drawdown will “grow enormously”; with Standard Life’s proposition already holding assets under administration of over £11bn.
He cited the example of New Zealand, which opened up the annuity market several years ago and “virtually no one” is buying them.
“Annuities will still be bought by those seeking a guaranteed income, but I expect a lot of people to keep their money invested and gradually draw it down, while a lot will also take their cash.”
peter.walker@ft.com
