The Standard Life IGC – could things possibly have gone worse?

standard life old It has not been a good year for Standard Life or its IGC. This hasn’t stopped the IGC from producing a report that weighs in at an incredible 91 pages, only the first 15 of which are directed at the policyholder.

As the point of the IGC is to act for members, it’s hard to know what the last 77 pages are for. While Rene Poisson, the IGC share states that the Standard Life IGC intends to report again in 2019, I sense that there is something valedictory about this report – it speaks well of its author – who clearly feels he needs all the support he can give himself.

In case you aren’t aware of the corporate shenanigans of the past few months

  1. Standard Life has formed part of a merger with Aberdeen to form a new entity Standard Aberdeen
  2. Lloyds Banking Group explored a joint venture which would have avoided Aberdeen becoming a competitor with Scottish widows and rejected the idea
  3. Standard Aberdeen (on the rebound) sold Standard Life to Phoenix Life in an asset stripping deal

From being the top Scottish Life Office, Standard Life is now a brand in the portfolio of Phoenix’s recent acquisitions, albeit a live brand.

Employers used to paying £1200 pa to engage with Scotland’s Premium Life Insurer will now be scrutinising the value of that money while policyholders will be asking why an extremely expensive member cost has delivered under-performance from the Standard Life default investment option.

In terms of Governance, Standard Life IGC now stands in relation to the Phoenix IGC in the same relationship as the Zurich IGC to Scottish Widows. It is fighting for its life.

The 91 page report can either be viewed as a last hurrah or as a bold bid for survival. Either way, Rene Poisson and his team are not going to go quietly.

Hardly engaging!

Whatever the merits of the IGCs approach to Value for Money , the management of the back book or Standard’s member engagement proposition, the main report is terribly written. Once we are outside the 14 page “idiot’s guide”, the quality of the writing detoriates to the barely comprehensible

In our last report we highlighted a significant decline in the speed of completing transactions which could not be managed by straight through processing

The syntax is so ambiguous that I had to read this several times to pick out the sense.

Here is another example

 In the IGC’s view, the actual and the opportunity costs inherent in this approach make it important that the right levels of risk targeting are chosen to capture adequate upside returns and minimise the costs of the approach, both in the early periods of the policyholder’s engagement and in later periods when investment returns (both positive and negative) have the greatest impact.

The tone of the “IGC Comment” is reminiscent of a Chancellor delivering a budget.

These changes will provide alternative channels and extended hours, making it more convenient for over two million Workplace customers to contact Standard Life, transact or access their pension savings

But this high-style is impressive rather than engaging. This report does little to engage with members. It is extremely hard to read and is unlikely to be read from beginning to end by anyone but me!

Value for Money

Despite its 91 pages, there is no clear statement of what Standard Life’s overt charges are. These charges are £1200pa to the employer and 0.75% pa of member funds. Hidden charges are on top of these costs. Were the FCA to deem that hidden costs needed to be met by the 0.75% annual management charges, Standard Life’s default fund would be illegal. The £1200 employer cost needs to be paid on top of statutory contributions severely limiting the capacity of most small employers to pay at higher than minimum levels.

To justify these heavy costs, the Standard Life “Good to Go” workplace pension proposition has to be considerably better than its rivals to be value for money. In the Vfm analysis conducted by the IGC, there is no attempt to justify the contract charges of Good to Go.

Instead we get a long and involved discussion on the merits of Standard Life’s default investment options which focusses on other questions




These are interesting questions for a discussion with Standard Life’s discussions with Redington but these are not questions that get properly answered in  this report.

Instead they lead to a fourth question


The IGC report pushes at the boundary between the IGC as a member champion and the IGC as an investment adviser.

The IGC has challenged Standard Life to consider whether the structure and objectives of the current offerings might be improved, and intends to engage further with Standard Life in 2018/19.

The IGC met 9 times in 2017/18k , though it planned to meet only 4 times. There is something very abstract about this discussion. It seems to me that it diverts discussion from the very practical issues that members are paying full whack for an underperforming fund and employers are paying £100 pm for a proposition that is now in the change of closed-book insurer.

peer standard

Source- Salvus


I give the Standard Life IGC report an amber for its VFM assessment, in its serious intent it is brilliant , but it somehow misses the point.


As far as I am aware, Standard Life’s IGC is unique in having its own adviser -Redington. This implies a significant budget (backed up by the 9 meetings conducted last year).

It also elevates the discussions to a much more theoretical level. While much of the 91 pages is theoretical, there is also evidence of a lot of practical work including a review of 174 funds and 179 strategies.

There is considerable energy in the report and I sense that much has been done, however it is hard to work out exactly what has been done, so difficult is the report to follow.

However I should not confuse the endeavour for the articulation of that endeavour, while the latter is confusing, the former is obvious. I consider that the IGC is highly effective and give it a green.

In conclusion

Reviewing the Standard Life IGC report has been a labour (and not of love). I have read it and read the appendices, I remain confused about what the real intent of the report is, I suspect it is primarily a political statement.

That’s not what a report like this should be.  Despite all my criticisms, I find this report, like its predecessors – a thing of wonder!


About henry tapper

Founder of the Pension PlayPen,, partner of Stella, father of Olly . I am the Pension Plowman
This entry was posted in IGC, pensions and tagged , , , , . Bookmark the permalink.

Leave a Reply