Standard Life’s new intention to buy strategic distribution arms this year has been kick-started by the purchase of Skipton Building Society’s advisory business, a spokesman has confirmed.
The Edinburgh-based provider announced the launch of its wholly-owned, UK-wide, financial advice business with the purchase of Pearson Jones from Skipton Building Society.
After the announcement, a spokesman for Standard Life said the life and pension provider planned to expand this arm of its business “organically and inorganically” but has not set any targets for how quickly it should grow.
She said: “Growth will be accelerated through the purchase of progressive financial advice firms which align well with our operating model.”
Over the past few years, Standard Life appeared to be leaving the advice sector behind to focus on direct-to-consumer channels. It sold its 10 per cent stake in SimplyBiz in 2013, its 15 per cent holding in 2Plan during 2010 and, in 2010, it divested its 20 per cent stake in RSM Bentley Jennison.
Last September, when Standard Life announced it would be selling its Canadian arm to Manulife, David Nish, chief executive, repeated his intention to bolster the firms’ direct-to-consumer arms.
Until the Skipton deal, Standard Life’s only interests in the advice industry were its 100 per cent holding in Threesixty Services, and a 25 per cent stake in the Tenet network.
When asked whether this constituted a U-turn, the spokesman said there was “no change in strategy at the firm”.
In a statement, Standard Life said its plan to rebuild its advisory arm was part of a response to “fundamental changes”, such as the incoming pension flexibilities.
The statement said: “Standard Life is building our own UK-wide advice service, delivered face-to-face, on the phone and through digital services. It will integrate with Standard Life’s existing workplace and direct services by providing a natural next step for customers with needs that can no longer entirely be met through self-service or guidance.”
Standard Life has said its stake in Tenet will be unaffected by the acquisition while Threesixty will provide compliance and support services to the new business.
Martin Greenwood, chief executive of Tenet, said: “As far as we are concerned, it is business as usual.”
Matt Preston, an analyst with Berenberg Bank, said the acquisition was a change in strategy.
He said: “It is the same for everyone. The market has moved on and before last year’s Budget the need for advice was much less so the change is more reactive than proactive.
“There are obviously more regulatory risks with running advice than not doing so but you can understand why companies are looking at having more vertical integration.”