Life insurance companies are not in favour and haven’t been for some time. The consolidation of the sector around a few financial behemoths L&G, Aviva, Royal London , Prudential , Quilter , Aegon , Just and LV= leaves no trace of the roots of these companies in concepts such as mutuality, equitability, co-operation and the fundamental issues of life and death that insurance addressed and to an extent resolved.
Prudence just about survives though the Prudential is slowly departing leaving its legacy in the UK to M&G. The concept of mutuality, while alive and kicking in the US, is barely spoken of in the UK, there are only two giant brands left in the UK, whose brands evoke the principles on which life companies were founded. The first is Scottish Widows, the second is Standard Life.
Scottish Widows is a protected brand within the Lloyds Banking Group, though long since stripped of its mutuality, the brand reminds us that life insurance was originally targeted at protecting Widows and orphans, I’m not sure that’s high on LBG’s priorities but the widow still resonates, though now a kind of show-pony.
Since it was founded in 1925, Standard Life came to become the powerhouse of the Edinburgh based Scottish life insurers, only twenty years ago its peers included Scottish Equitable, Scottish Amicable, Scottish Mutual, Scottish Life and Scottish Provident.
Standard Life disdained any claims to being Scottish, in its name was a claim to universality! When you pass its impressive offices in Edinburgh, you feel a certain gravity – it looks out over the castle – a financial rock.
But Standard Life is no longer the proud rock it once was. Wikipedia will tell you
Standard Life Aberdeen plc (formerly Standard Life plc), is a United Kingdom-based global investment company . In March 2017, Standard Life reached an agreement to merge with the investment company Aberdeen Asset Management. Standard Life was renamed Standard Life Aberdeen on 14 August 2017.
The traditional life insurer which provided money when people lived too long, died too soon or lost their earning capacity was swallowed by Phoenix Life.
Now we hear in Money Marketing that
The curtain is set to fall on the 200-year history of the Standard Life name as Phoenix is set to buy the brand, according to reports.
It would seem that Aberdeen has chewed Standard around for a couple of years and decided that the brand has little value to it. Aberdeen – an investment brand – better suits the purposes of its customers – primarily investment advisers operating in the “wealth management space”.
But I query whether the Standard Life brand will be curtained if it does become the sole possession of Phoenix.
Why lose the trust of millions?
Trust in financial services is hard to win and easy to lose. Equitable Life lost the trust of its professional client bank in a few short years. Standard Life benefited – picking up some of the pieces, despite wobbling with the problems surrounding the sale and management of endowment policies, Standard Life is still recognized as a symbol of probity, ironically it vies with Widows as Scotland’s best know pension brand.
Ironically, research by Ignite, Quietroom and other pension communication firms, confirms that most people still see pensions as a form of insurance rather than an investment. When I say “most” , I mean the people who aren’t beating a path to St James Place’s door and don’t consult independent financial advisers. These people still associated pensions with work and see their employers as helping them get a wage in retirement.
While Aberdeen Standard help in the management of pension funds, they are not a pension company in the sense of insuring people’s future. So the Standard brand is of little use to them (especially as Standard Life investments messed up by taking a huge bet on GARS which went wrong).
But Phoenix is quite different, it now owns a bundle of books of business built up by the mutuals of yester year and it owns the life company “Standard Life”. Standard is Phoenix’s only “open” workplace pension, it has not one but two authorised master trusts and it has a very decent GPP used by a lot of big firms including BT and Heineken.
I suspect that Sky news’ story in Money Marketing, intimating curtains for the Standard brand relates to it as an intermediary orientated investment brand. Standard Life – as owned by Phoenix – manages investment to an end – assuring people’s futures. But it is not an investment company, it is providing people with insurance against clients living too long and dying in poverty.
Much has been made by Aberdeen of Standard Life’s heritage, they even own a firm that advises on the back of the near 200 year history of brand.
Will Robbins, who’s New Model Adviser site also reports on Aberdeen dumping the brand, picks up on the irony of this
Whatever happened to Standard Life?
Why should Phoenix lose the trust of millions. Standard Life should knuckle down and become the company it set out to be in 1825 , serving the millions of savers, turning those savings into investments in their later lives.
From what I know of the Phoenix management, that is exactly what Phoenix intends.
The marriage between Standard and Aberdeen was never looking like a happy one, the Standard brand is stronger for it being within Phoenix and I wish the life company every success. It is a rock.
If you remove the competition you lose innovation and the institutions coast along on the fat of the back book.
It should be remembered that you only coast downhill.
The dysfunctional advice regime is being pushed further up market with SJP mopping up in the middle ground on margins similar to the Oxford Street clip boards of the 70’s
I hope that you succeed with AgeWage in ultimately producing a fairly costed mass market product but you won’t do it at the thinking level that is responsible for the current failure of a nation to provide income beyond work
I couldn’t agree more with what John Mater’s Comment and your article has said about Std Life.
When I joined a reasonable firm in 1977, part of their Employment Terms were, that if I was offered permanent employment I had to join their Pension Plan. They assurred me that it was a good plan and, when I went to get a mortgage and I offered the Branch Managers my Pension Plan details they never said they were insufficient. After ten years I left that job and went on my own. During the 1990s there was a turmoil in the Pensions industry referred to as the Stakeholder debacle, so guided by, I think the Daily Mail Finance pages, left well alone. In 2002 I joined the Met Police, who come under the Civil Service Pensions, except they also have a scheme whereby employees can contribute to extra pension. I was interested and MPS first said they had a Plan with Scottish Widows. I pointed out that SW were in the eye of a storm at that time and I was advised to leave it while they looked into it. In due course they returned and advised their Plan was now with Std Life & Co [SLAC]. I was pleased, since my former pension was still with them. I called SLAC and requested details of the MPS scheme. Oh No, I had to go through an IFA because, inter alia, they didn’t deal direct with customers…? I protested but they insisted. The MPS contact could not believe it and checked whether that had come from the number he had given me; confirmed. He would take it up with them. He advised me later that they would email me the details which they did. I joined for thirteen years. And now a tale of two cities. In the meantime I received an inheritance, yet could not easily find a suitable agent to advise on investment. At that time SJP were being recommended by the Sunday Times Finance Section while the Daily Mail sniped at the firm but, then, they are good at that. If you haven’t got any critics then you must be running a good scam! In 2015 after retiring I contacted SLAC [City 1] regarding how to receive my two Pensions and it was heavy going. I happened to mention that to SJP [City 2] who offered to assist if I gave them authorisation; I did. Surprise,surprise, it yielded a contact from SLAC who was eager to do business. The outcome was that from the same recommended provider [Just] SJP were ahead with their Just offer over the same from SLAC. Perhaps it was a difference in commision. Goodbye SLAC !
Like Pensions, people tell you to find a good solicitor; how? The time that you will definitely know if they are any good is when you settle their bill.