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Platform Focus: How Standard Life is looking to evolve

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With first mover advantage among life companies undergoing the meta-morphosis to wealth management platform, Standard Life has built £19.4bn in AUA as at December 2013.

The platform has a loyal support base with highly rated service and technical support and ongoing investment in functionality upgrades, the third-party DFM hub being a recent example. 

The bête noire for Standard Life has always been price, with a complex charging structure and relatively high fees for Sipps where advisers are on the standard terms. 

The group says its preferential rates with fund managers make the total cost of ownership the important focus for the customer.

Standard Life has been a champion of super-clean share classes. In March it was reported that the platform had secured deals on more than 290 funds at an average discount of 14bps. 

While some critics dismiss the impact of this, these funds represent £10bn of assets on the platform and we are told that £6.5bn of assets will have moved to these share classes by the summer.
So many Standard Life customers will access funds at lower prices than elsewhere.

Negotiations of clean share classes are not static. We expect larger groups to secure more super-clean deals and advisers should look at the total cost to client as the percentage of any portfolio captured by these deals should increase. In the short term, patchy coverage makes it hard to assess.

Aegon’s new £1,215 price cap is an important development and advisers with £500,000-plus portfolios in particular need to be aware of this and question
at what point extra fees are justifiable.

Developments of the Standard Life platform in the past year include an intended review of fund supermarkets – Sigma and FundZone – with the intention of upgrading or amending these services to be more wrap-oriented. 

As well as analysing its legacy platforms, the group announced plans to boost investment and model portfolio capabilities, launching a panel of 12 DFMs that trade on-platform. 

The panel includes Standard Life Wealth.

Standard Life is an evolving and improving platform but advisers need to watch the associated costs and the group must truly put its customers at the heart of its actions.

Holly Mackay is managing director at The Platforum

platforum

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