Questions have been raised about whether the premium price Standard Life Aberdeen charges for its platform will be justifiable once it has sold its insurance arm to Phoenix Group.
In March Standard Life Aberdeen agreed to sell its book of insurance contracts, including annuities and workplace pensions, to Phoenix as part of a £3bn deal, but it will be keeping its platforms and advice business.
Phoenix has previously told FTAdviser it "will not be changing their terms and conditions in any way", including the fees and charges currently in place for the products.
But Phoenix has also said the acquisition will allow it to make "significant" cost synergies, with up to £720m of savings expected.
This prompted Mark Polson, principal at the Lang Cat consultancy, to question how Standard Life's charges could be justified if these cost savings are achieved without major disruption of the service that advisers get.
He said: "If it goes badly then it goes badly but if it goes really well and Phoenix has realised some of the cost synergies and it manages to give really cracking customer service then you have got to ask how hard was it really and with Standard Life were you paying for the name?
"You would see strong pressure from firms to say 'we have just reduced the running costs so when do my clients start to benefit from that and if they don't I don't know why I am paying that premium any more?'.
"I feel like Standard Life have crossed a rubicon. This is a moment where the most expensive provider in the market defends its premium position in the market on the grounds of service."
Standard Life Wrap charges start at 0.4 per cent for for the first £99,999.99p in Isas, personal portfolios and cash accounts and then gradually decrease to 0.1 per cent as the assets go over certain levels.
Meanwhile Cofunds charges start at 0.29 per cent for the first £100,000, FundsNetwork charges a flat fee of £45 plus 0.25 per cent and AJ Bell charges between zero and 0.2 per cent.
Fundscape recently reported when looking at pure retail advised business, stripping out direct-to-consumer, institutional and workplace savings, Standard Life Aberdeen was the fastest growing platform in 2017 in terms of total assets, gross sales and net sales.
Under this categorisation, the Standard Life Aberdeen platform has assets of £54bn and saw net sales of £7bn last year.
In terms of net sales it was followed by Aviva, which saw £5.7bn, Old Mutual with £4.4bn, Transact which saw £3.1bn and AJ Bell, which saw £3bn.
Aviva's presence among the top spots in many of these categories comes after weeks of bad news about the company's platform following its upgrade in mid-January.
Problems began when the Aviva for Advisers platform was offline for more days than originally planned for upgrade work to allow the platform to move to FNZ Technology Service.
But the platform has been causing advisers issues into March as several services have not been available, including client reporting.
The Phoenix deal was announced early in March in Standard Life Aberdeen's first annual results since the merger between insurer Standard Life and asset manager Aberdeen last year.
Standard Life Aberdeen will keep hold of its three adviser platforms - Wrap, Elevate and Parmenion - and 1825, its financial advice business.
The sale comes after Standard Life Aberdeen's biggest client Scottish Widows withdrew £109bn of assets from the company in March.
At the time Scottish Widows chief executive Antonio Lorenzo said the merger of Standard Life and Aberdeen has resulted in his company's assets being managed by a "material competitor".
As part of the deal for the insurance contracts business, which comes with £158bn of assets, Phoenix Group will pay £2.28bn in cash and Standard Life Aberdeen will take a 19.99 per cent stake in Phoenix.
The two companies will also "significantly expand" their strategic partnership, with Standard Life Aberdeen becoming Phoenix's "preferred, long-term asset management partner".
A spokesman for Standard Life Aberdeen said: "Standard Life platforms are consistently award winning and we believe advisers choose them because they are among the best and most financially secure in the market.
"Under the proposals, the whole adviser platform business is staying with Standard Life and not moving to Phoenix. That includes the associated relationship management and client and customer administration and servicing.
"We are on record as being committed to keep making substantial investments in our adviser platform business, to further enhance the service advisers receive, and this investment will continue."
A spokesman for Phoenix said: "Platforms and all their adviser and client servicing remain with Standard Life Aberdeen – these parts of the business are not being acquired by Phoenix."
damian.fantato@ft.com
