Standard Life’s 1825 imposes portfolio cap on SLI holdings


It has emerged Standard Life’s financial planning arm 1825 operates a cap on the proportion of clients’ assets that can be held in funds managed by the wider group.

Vertically integrated firms, such as 1825, have come in for criticism over recent months for business models that appear to favour the recommendation of in-house investment solutions.

But Money Marketing understands 1825 has a limit in place so that client portfolios can only hold up to 30 per cent of assets in Standard Life Investments funds.

It is unclear whether such a cap is imposed across other vertically integrated firms. It is understood some advice firms have been deterred from agreeing to acquisition deals on the basis that firms have discussed targets around fund flows to in-house offerings.

Old Mutual Wealth chief executive Paul Feeney has previously told Money Marketing “nobody has any target anywhere in Old Mutual Wealth to drive business to our investment solutions”.

Rival providers have hit out at the vertically integrated business model, while influential industry analyst Ned Cazalet says the desire to replicate St. James’s Place has created weak firms.

1825 chief executive Steve Murray says: “The 1825 managed portfolios were launched in July 2015 and form a core element within our centralised investment proposition. They are broadly diversified multi-asset portfolios which invest in a wide range of funds from across the market including those managed by Standard Life Investments. When we launched the portfolios we set investment guidelines covering a wide range of factors including limits on fund manager exposure.”

He adds: “There are a range of other investment options available where client goals and circumstances require a different approach or portfolio structure, whether that be multi-asset funds, a tailored DFM portfolio or single asset fund holdings.”