Too Nish for Standard Life?

In an announcement that caught many industry analysts off guard, Mr Nish said it was the right time to “pass the baton”. Mr Nish also stated that he had mixed emotions about leaving, which could suggest that the move is not entirely amicable, according to Barrie Cornes, analyst at Panmure Gordon.

He added: “Standard Life has confirmed that no ‘golden goodbye’ payment will be made, but in discussions with the company any such suggestion of a rift is rejected.”

A spokesman for Standard Life said his departure was a mutual decision, and followed months of meetings between Mr Nish on the group’s development strategy.

Mr Nish was appointed chief executive on 1 January 2010, having been finance director at the group since November 2006. Prior to his tenure at the group, Mr Nish was a partner at PricewaterhouseCoopers and finance director of ScottishPower.

Standard Life has come a long way following its demutualisation in 2006. It was listed on the London Stock Exchange with an unfathomable reputation as a leading assurance provider.

Since then, the firm has endeavoured to add some more muscle to its asset management arm through the acquisition of Newton Private Clients in a deal worth an estimated £83.5m in 2014.

In the same year, the group also purchased Ignis Asset Management – a subsidiary of rival insurance providers Phoenix Group Holdings – for £390m.

Life companies aren’t daft, despite what people think, and they will continue to have a place

Meanwhile, Standard Life shed its longstanding foothold in the insurance marketplace through the £2.2bn sale of its Canadian companies to The Manufacturers Life Insurance Company, a subsidiary of Manulife Financial Corporation, in January.

The group, which had been present in Canada for more than 180 years, said the sale of its assets formed a part of a wider strategy away from the Canadian long-term savings business towards a less capital-intensive, fee-based revenue business.

The transaction generated a £1.75bn return for shareholders.

“The disposal of the Canadian operation is among David Nish’s biggest achievements during his tenure at Standard Life,” Matt Preston, an analyst at Hamburg-based private bank Berenberg, said.

“No one expected the company to achieve the price that it did. It represented a key milestone to its transformation from life insurer to asset manager.”

As further evidence of Standard Life’s shift in focus, the group sold its healthcare subsidiary for £138m to a subsidiary of South African group Discovery Holdings Limited in 2010. It later went on to acquire financial software company Focus Solutions Group, for £42m in the same year.

Furthermore, the group recently announced its intention to close its insurance business in Singapore, which will generate a non-operating loss of about £45m.

Standard’s Life transition from life assurer to asset manager is attributed to the high margins which can be achieved as the latter, according to Mark Polson, founder of the Edinburgh-based the Lang Cat consultancy.

“Right now all the fat is in asset management – so if you can get your funds bought through your vehicles then that’s perfect. Of course, this is a return, in a way, to the old days, when you bought life company A funds inside life company A’s product, and nothing or nowhere else. Much more choice now – indeed whole of market – but the principle is the same.”

He added: “Life companies aren’t daft, despite what people think, and they will continue to have a place. Risk management remains a useful function, and bulk admin capability stays important for workplace pensions.

“But the core savings business that many of us grew up with has changed beyond all recognition. I don’t know everything Mr Nish did, but he certainly brought a strong commercial focus which was a big change for some.”

Mr Nish will hand over the reins to Keith Skeoch, head of Standard Life’s fund management arm, which managed £245.9bn as at 31 December 2014, subject to regulatory approval.

On 19 June, the day Mr Nish’s impending departure was announced, shares in Standard Life opened at 474.3p, reached a high of 476.7p and a low of 472p before closing at 473p.

On 22 June, shares in the group were up at 484p by close of day.

“The activity in the share prices shows that people are not concerned by the change in chief executive. They are taking the news in their stride.” Mr Preston said.

Mr Skeoch joined Standard Life Investments in 1999 as chief investment officer after nearly 20 years’ investment experience at James Capel & Company in a number of roles, including chief economist and managing director international equities.

Under his leadership the value of assets managed by Standard Life Investments grew from £56.9bn to £245.9bn.

Mr Skeoch’s appointment will be seen as a safe pair of hands that will continue to build upon Standard’s Life asset manager status, according to Mr Cornes.

Mr Steel agreed: “I have no doubt that Mr Skeoch will be excellent as chief executive because the business is similar to what he has been managing – it is unit-linked and adopts a fee structure.

“On one level, you have a change of chief executive from a man who has transformed the business to another who has achieved a tremendous result as head of the investment arm.”

Mr Nish is to step down in August having spent nearly six years in the role, during which he oversaw a growth in the group assets under administration from £170.1bn on 1 January 2010 to £311.9bn as at March 2015.

His tenure delivered an increase in share price by approximately 118 per cent to 474p up until the day before the announcement of his departure, and total returns of around 191 per cent to shareholders.

Oliver Steel, an analyst at Deutsche Bank, said: “If you look at other life assurers such as Aviva and L&G, no one has transformed its business to the same extent as Standard Life

“Mr Nish had a great vision of simplifying the business. When he came in as group finance director, Standard Life was an old-fashioned life company selling annuities and life insurance products. Now its focus is towards the asset gathering business.”

Mr Nish is yet to disclose his plans for the future, although he is due to go on gardening leave on 1 October until the end of March next year.

On Mr Nish’s departure, Sir Gerry Grimstone, chairman at Standard Life, said: “Mr Nish has shown great leadership over the past six years and the outstanding progress we have made in that time has been achieved through his incredible drive and determination. He has changed the shape of Standard Life allowing us to successfully grow globally through world-class investment management and distribution businesses.”

Myron Jobson is a features writer at Financial Adviser

Key Points

David Nish’s departure from Standard Life marks the end of an era.

The group is shifting from life assurance to asset management.

His tenure delivered an increase in share price by approximately 118 per cent to 474p.