In August 2013, Skandia announced it would be excluding old legacy business from AUA, reporting just figures for its core Skandia Investment Solutions platorm, which is its focus for new business post-RDR. This aligns the platform with how Old Mutual reports its platform data to the market.
Skandia’s proposition developments did not stop there. In February 2014, the group rolled out its Wealth Select range, nailing it colours to the mast as a platform which is housed in a broader wealth management business. The feedback we heard from advisers was positive from those looking for an “all-in-one” solution – an investment onesie if you will.
The group secured preferential terms with asset managers who will run mandates for the group at an average cost of 52bps. These building blocks will blended into over 70 different models by Old Mutual Global Investors’ multi-manager team. Asset allocation is to be provided by Towers Watson and the fund managers included at launch were Aberdeen, Artemis, BlackRock, Fidelity, Henderson, Invesco, J P Morgan, Newton, Old Mutual Global Investors, Schroders and Threadneedle.
What have advisers made of this development?
Well, feedback is mixed but then Skandia always has been Marmite. Clearly, advisers wanting free range will not be excited. Other advisers wanting to “de-risk” their businesses may find it compelling and the end-to-end process should certainly make for a smoother journey. At an average of 52bps for the investment building blocks, plus a platform fee starting from 50bps and tiering down, this is a model portfolio solution where ongoing rebalancing is managed and a riskmapped solution of leading asset managers is produced at an ongoing cost of about 1 per cent (including platform/fund/model provision).
From the client perspective, it provides access to good quality managers at a decent cost and importantly this is not a “set and forget” strategy. Thorny issues for the platform include portability and re-registration and, yes, commercials played a part in the manager selection.
We want to see how Old Mutual UK boss Paul Feeney repositions the platform and asset management businesses. We do not think the full picture has been revealed yet and, for now, it feels a little like a business in transit.
Holly Mackay is managing director at The Platforum
Thomas and Thomas Finance principal Darren-Lloyd Thomas
Customer service from the Skandia call centre is not as good as it used to be. It takes longer to resolve a problem and there seems to be less urgency. But our local rep is excellent when things do go wrong. From a functionality point of view, the platform is really first rate, particularly the model portfolio bulk switching.