While the decision by Old Mutual to scrap the Skandia name may make sense to senior management and image consultants focused on aligning a global brand, it has left many advisers scratching their heads.
Launched into the UK in 1979, Skandia spearheaded the growth of platforms and multi-manager with the firm’s innovative approach, making it an adviser favourite.
Times a’ change and like everyone involved in financial services, a number of big challenges must be navigated in the face of sweeping regulatory reforms and evolving consumer demographics.
The platform continues to struggle with profitability despite amassing around £40bn of assets while it recently set out its stall on unbundled charging by unveiling a unit rebate structure which it hopes will allow it to steal a march on competitors. The platform space is only likely to get more challenging and competitive in the years ahead with the eventual winners and losers far from clear.
On investment, the multi-manager-focused Skandia Investment Group was, and still is, a good fit with the broad range of equity and bond fund offerings from Old Mutual Asset Managers.
Predicted RDR trends towards a greater use of multi-manager/multi-asset solutions and outsourcing investment selection play to SIG’s traditional strengths and the upcoming launch of its income-focused multi-manager range appears to show a continued push for innovation.
The firm is also developing a low-cost fund range targeting restricted advisers. It is still far too early to predict with any certainty the way the investment intermediary market will swing post-RDR and whether this is a defensive play or a real priority for growth.
However, desite all this, Old Mutual is the stronger global brand and if a choice between the two names had to be made at a global level, there was only ever likely to be one winner. As marketing expert Lucian Camp points out in this week’s Money Marketing, in today’s world of global financial services, a decision that looks surprising at a local level often makes more sense when you take a global view.
Nevertheless, axing the Skandia brand is hugely symbolic. The power of the Skandia brand among UK intermediaries was trumped by a desire for global alignment. That a decision can be made to scrap perhaps the strongest IFA brand currently in existence points to the huge structural changes facing the sector over the coming months and years.