Tiller: Standard Life takeovers not death of choice

Tiller: Standard Life takeovers not death of choice

Standard Life’s head of adviser and wealth manager propositions has denied consolidation in the platform industry limits choice and explained how the provider plans to turnaround the fortunes of Axa’s platform.

Standard Life today (4 May) confirmed it had agreed to purchase the French insurance giant’s portfolio services, known as Elevate.

Elevate has struggled to turn a profit in recent years, since launching as a standalone arm of Axa in 2008. In 2014 it reported £17.1m loss.

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Last year the company revealed it had missed its five-year target for assets under management of £34bn by £5bn.

Speaking to FTAdviser, David Tiller said the Scottish life and pensions company will reverse Elevate’s ailing fortunes by investing in the platform, a signal, he said, of Standard Life’s intent to stay in the market for the long term.

“It will be different because we are getting the best ideas from two platform businesses,” he said, pointing to his company’s years of experience in the adviser platform market with the Standard Life wrap.

He said the two platforms will have a shared service provider in FNZ, meaning there are “opportunities to streamline” the technology they use , including the risk and governance processes and the way client money is managed, which he said is an “immediate priority”.

When asked about possible reduction in charges to clients as a result of post-merger economies of scale, Mr Tiller said Standard Life is looking to “present a price that represents good value”.

“The key thing is we want a sustainable and reliable platform service so we have to make sure there is enough money to provide that.”

Mr Tiller said until Standard Life has completed a commercial review of the proposition then he cannot speculate about changes to the platform charges.

The pattern of consolidation across the platform industry has been a concern for some advisers who have felt the decline in the number of businesses reduces choice.

However, Mr Tiller disputed this, arguing too many platforms which do not have enough money to invest in their proposition does not necessarily create choice.

“It’s healthy to have a number of players in the market, but they have got to be credible players and actually have the money to invest and develop further.”

He added Standard Life has no plans in the “foreseeable future” to change the service Elevate provides or the support that goes with it.

Until the business knows whether the needs of Elevate advisers matches up with that of Standard Life’s wrap advisers it will not commit to any particular strategy.

“If it means we run with two platform propositions then that is what we are going to do. Our aim going forward is to not impact the advisers and their clients.”

Bill Vasilieff chief executive of Novia Financial said: “When big institutions are not making the money they would like to make then they pull the plug.”