PlatformsMay 4 2016

Conway says Standard Life Elevate deal marks tied’s return

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Conway says Standard Life Elevate deal marks tied’s return

Alastair Conway, chief executive of James Hay Partnership, has predicted a return to the “old world” of restricted salesforces, following the sale of Axa Elevate to Standard Life and subsequent sales of a similar nature.

Speaking to FTAdviser, he said he believed there will be less life insurers in the market in a couple of years time.

Mr Conway said: “I think there will be more of the old world where you’ve got tied, restricted salesforces selling products of only one or two manufacturers.

“So it has gone back to where we started from. All that work - 30 years - all one big circle.”

So it has gone back to where we started from. All that work - 30 years - all one big circle. Alastair Conway

He said there could be breakouts, because people will not want to deal with tied models, adding there is a real opportunity for advisers.

“The challenge comes with an Old Mutual or Standard Life providing the advice and the funds and the platform.

“Some investors they will look at it and go ‘that’s quite compelling, so why would I go to an IFA when I’ve got something that looks like this?’

“The challenge for advisers is how they will differentiate from these models. There is an opportunity there because I think they can differentiate, but it means they need to stay on their toes and keep evolving, because that will look very much like a Standard Life or an Old Mutual.”

Mr Conway said he was not aware of any more big deals coming up in the market, but added a lot of moves had been going on behind the scenes.

“Standard buying Elevate is huge, if Aegon were to buy Cofunds then that is huge. The Suffolk deal into Curtis Banks is a big deal in this market place.

“Interestingly, if you look at it a lot of it focuses around decisions by life companies. I mean take the Axa decision, I’ve been standing on stages for five years saying Paris will pull the plug at some stage, you just don’t know whether they will or not; I guess that they ran out of patience.”

He added that while others are looking for the exit, Standard Life have proved to be the insurer which has stuck at it.

“If you are the French at Axa looking at their portfolio around Europe, there is loads of other markets where pricing is much higher and they can get a much better return on their capital than they can sinking it into a platform in the UK and paying FNZ 12 basis points, or whatever they are paying the platform.”

ruth.gillbe@ft.com