Standard Life Aberdeen will sell the “Standard Life” brand to Phoenix over the course of 2021, and SLA has already initiated a branding review of its businesses, with the outcome due to be announced later this year.
Although it has not been revealed how much Phoenix has paid to acquire the brand, SLA confirmed that a number of employees that work on the brand will transfer to Phoenix and SLA has paid £32m to carry the cost of this.
SLA said that the sale of the brand and the transfer of related marketing employees were not expected to impact materially on its results.
Stephen Bird, chief executive officer of SLA, said: “The Standard Life brand has an important heritage. In the UK, it has strong recognition as a life insurance and workplace pensions brand. This is closely aligned with Phoenix’s strategy and customer base.
“This is much less the case with the business we are building at Standard Life Aberdeen which is focused on global asset management, our market-leading platforms offerings to UK financial advisers and their customers, and our UK savings and wealth businesses.
“That’s why I am excited about the work we are doing on our own brand, which we look forward to sharing later this year.”
Phoenix Group bought Standard Life Aberdeen’s insurance arm in August 2018 for £3.24bn as the firms entered a long-term strategic partnership.
According to the firms, this deal was “highly complex”. To simplify the relationship, SLA will now pay Phoenix £62.5m to buy the Wrap Sipp, onshore bond and Trustee Investment Plan businesses, which represent £36bn of assets under management.
In addition, the firms’ strategic asset management partnership, under which SLA currently manages £147.4bn of Phoenix Group assets, will be extended to at least 2031. It originally ran to 2028.
Other existing services and platform arrangements between the groups will gradually be terminated to simplify the strategic partnership.
Phoenix will also pay SLA £34m to settle legacy matters.
SLA’s shareholding in Phoenix Group will remain 14 per cent and it retains the right to appoint a director to the Phoenix Group board.
Andy Briggs, chief executive officer of Phoenix Group, said the extension of the asset management deal “recognises the global expertise and excellent service that Aberdeen Standard Investments delivers to Phoenix Group and our customers as our preferred asset management partner”.
He added: "I am delighted that Phoenix now owns all of the life and pensions business of Standard Life, including the brand and all distribution and marketing, and we are committed to investing in this business.
"This will enable Phoenix to accelerate the delivery of a broader set of product and service propositions to meet the financial needs of our customers as they journey to and through retirement.
"I look forward to continuing to work with Stephen and his team to execute against our respective growth ambitions and deliver Phoenix’s purpose of helping people secure a life of possibilities.”
SLA's Bird added: “The most successful partnerships in business tend to be formed on clear and simple terms.
“What we are announcing today is an agreement that simplifies the relationships between Standard Life Aberdeen and our strategic partner Phoenix Group in a way that will allow us to work together constructively as partners for at least the next ten years. Both businesses will be able to play to their respective strengths in the partnership.”
amy.austin@ft.com
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