‘Life companies have to evolve like asset managers’

But for David Tiller, head of UK propositions at Standard Life Aberdeen, it is an essential task.

He says: “If you take your foot off the pedal, even for a relatively short period, it’s virtually impossible to catch up and you find yourself in a replatforming situation.

“The UK is becoming a very sophisticated platform market. Pensions freedoms is a model we’re exporting around the world, and the challenge is there’s always more to automate, and a lot of it comes from their capabilities, which is great, but it does lead to exponentially more complex platforms.

“The replatforming [of other platforms] has proved that you can’t take a platform off the shelf and expect it to work. The huge amount of work done to make it work is part of the value proposition of the different platforms.”

The technological revolution is to do with client technology and it will mean things that were difficult and expensive to do will be much easier to do.David Tiller

Mr Tiller is responsible for two platforms; Standard Life Wrap and Elevate, the latter of which the company bought in 2016 following the break-up of Axa Wealth. Both platforms operate on the FNZ platforms, so speculation immediately leapt on whether the platforms would merge.

But for the time being, it seems they will be entirely separate. Mr Tiller says: “The regulator does not believe a single platform can stretch from one end of the market to another, that’s quite an important point. For a business like ours that wants to serve across the broad spectrum of society we need to have more than one proposition.”

He adds: “98 per cent of people who take advice and require a platform can be served by Elevate. The average Elevate person has £120,000 to £130,0000 [to invest], they will have two tax wrappers; the investment base is probably either an advisory model portfolio or a multi-asset portfolio.

“The average Wrap client would have over £250,000, multiple tax wrappers, advisers will use a range of different investment solutions, such as discretionary portfolios.”

This means that the different platforms have quite different functionalities, and while Elevate has more clients, Wrap is two-to-three times bigger. Assets under administration across both is at £57.7bn, at the end of September.

Technological revolution

Standard Life Aberdeen has been through a transformation in the past few years, from a traditional life office to fundamentally an investment business. The company merged with Aberdeen Asset Management last year, meaning the platform business has become a fundamental part of the company as this is the way to access such investments for clients.

Mr Tiller says: “This job is exactly at the intersection of investment and technology, and that’s a hugely exciting place to be. We will see revolutionary change to savings and investments: the way people engage with long-term savings and investments is changing and will continue to change.

“The technological revolution is to do with client technology and it will mean things that were difficult and expensive to do will be much easier to do.”

For example, currently in development at Standard Life is the use of an algorithm that takes on board the funds a client already has and creates solutions that suit his or her requirements.

Mr Tiller explained when this could be useful: “If somebody has capital gains issues that could be managed, if there’s individual client preferences that need to be managed, or it could be managing across multiple portfolios for somebody who’s in retirement and living off their pension rather than living off their annuity.

“It’s democratising things which through technology we can make much more available to many people.

“The application of technology on investment will create more attractive solutions for customers in the future, and there’s a big change going on with customer decision-making: individual decision-making is rising and individuals are becoming responsible for their future.”

Mr Tiller has been with Standard Life since 1991 – having been in Standard Life Wealth and having helped set up Standard Life Investments.

The company was clearly a different creature when he joined, being largely a life office, but he has since seen it turn into an asset manager, after it sold its pension book to Phoenix Group last year, following the merger with Aberdeen. 

So, how does he see the future of the traditional life office? He says: “Traditional life products are further away from platforms, but there will always be a demand for businesses that are willing to underwrite risk on their balance sheets.

“Life companies have to evolve like asset managers.

“At one end, with-profits demand is still there, but not near the scale it used to be. With annuities we’ve got a more reasonable balance.

“With customers in research saying, ‘I want a guaranteed income through life’, but when you say the word ‘annuity’, they say ‘no’. For many people at some point it’s the right choice.

“Phoenix are a specialist business; for the life insurance business it’s a great home, it will grow from strength to strength.

“We have the opportunity to really focus on creating a great investment company.”

Melanie Tringham is deputy features editor of Financial Adviser and FTAdviser.com