Scottish Widows sticks with Standard Life Aberdeen for retirement funds launch

Scottish Widows will continue to temporarily employ Aberdeen Standard Investments for its fund management business as it launches a new range of retirement funds.

The company has built a variant of its existing pension portfolio fund range and is targeting investors in drawdown. It will keep Aberdeen Standard’s expertise to manage the passive bond part of the range.

Aberdeen Standard Investments, the investment arm of Standard Life Aberdeen, will also be in charge of managing the “dynamic volatility management” process for the new range, which aims to reduce the equity positions in the fund in case of significant market turbulence.

This month, Scottish Widows’ parent Lloyds Banking Group decided to terminate investment management arrangements with Standard Life Aberdeen on £109bn of assets.

The Scottish Widows Investment Partnership assets were pulled because Lloyds sees Standard Life Aberdeen as a rival.

However, after the announcement Scottish Widows chief executive Antonio Lorenzo hinted the firm might still consider Standard Life Aberdeen as a potential acquirer of the SWIP funds if it fixed its competitor issue with Standard Life Aberdeen’s insurance arm.

Last week, Standard Life Aberdeen announced it was selling its insurance business to Phoenix Group to concentrate on asset management.

Scottish Widows fund proposition head Iain McGowan tells Money Marketing the firm is currently “reviewing” the deal with Standard Life Aberdeen on its management of Scottish Widows Investment Partnership, as the Scottish rival still runs parts of its pension portfolio and new retirement portfolio funds.

McGowan says as the review continues the management of both retirement funds will continue for another 12 months.

When asked by Money Marketing, Scottish Widows declined to comment on whether it would consider selling back the SWIP funds to Standard Life Aberdeen.

McGowan says: “Whoever may be managing these portfolios at any point in the future under our instructions we would make sure they are managers with the ability of doing so. Nothing changes for 12 months”.

Retirement Portfolio funds
Name
Equity content range flexibility
Current Strategic Equity Allocation
Current Strategic Fixed Interest Allocation
Yearly Fund Charge
Scottish Widows Retirement Portfolio 10-40
10% to 40%
30%
70%
0.20%
Scottish Widows Retirement Portfolio 30-60
30% to 60%
50%
50%
0.20%
Scottish Widows Retirement Portfolio 50-80
50% to 80%
70%
30%
0.20%
Scottish Widows Retirement Portfolio 70-100
70% to 100%
85%
15%
0.20%

Source: Scottish Widows

Uncomplicated design 

The aim of the new four-strong multi-asset retirement portfolio range is to help people’s pension pots last longer and add more protection in volatile markets compared with the existing pension portfolio. 

McGowan says the pension portfolio fund range, which was launched in 2007, is more suitable for people in the accumulation phase, rather than income.

The new multi-asset funds invest in UK and global fixed-interest and equities, as well as index trackers, which make up the largest portion of the range, says McGowan

As a result, the asset manager claims to have one of the cheapest drawdown funds in the market, charging 0.2 per cent to investors in its retirement account.

McGowan says: “The retirement portfolio funds recognise customers’ need for real growth to help protect their income and lifestyle from inflation, while balancing that exposure with an appropriate level of investment risk.

“Our new funds are designed to address both of these requirements, without the need for expensive guarantees or complicated hybrid design.”

The new portfolio has been funded with £20m by Scottish Widows at launch.

Recommended

Antonio-Horta-Osorio-700x450.jpg
1

Failed Scot Wids Standard Life insurance merger talks behind £109bn blow

A breakdown in talks to merge Lloyds’ Scottish Widows arm with Standard Life’s pension and life insurance business led the high street bank to pull £109bn from the asset manager, according to reports. Last week, Standard Life Aberdeen shares fell 6 per cent on news Lloyds decided to end investment management arrangements with the asset manager on £109bn […]

Scottish Widows eyes hybrid drawdown launch

Scottish Widows is eyeing the launch of a hybrid drawdown product, Money Marketing understands. In a new magazine for advisers launched today, the provider notes the FCA’s observation “that product innovation has been limited for mass market investors in drawdown” and alludes to “announcements on that front later this year” from Scottish Widows. Providers have […]

Scottish Widows mulls Standard Life corporate pensions book takeover

Lloyds Banking Group is believed to be in advanced talks to buy the Standard Life corporate pensions book and roll it into Scottish Widows. The deal, following on yesterday’s announcement that Lloyds is buying the Zurich corporate pensions book, would make Scottish Widows the largest corporate pensions provider in the UK by a considerable margin. Speculation […]

Newsletter

News and expert analysis straight to your inbox

Sign up

Comments

There is one comment at the moment, we would love to hear your opinion too.

  1. So the sceptics were right when they said the only reason the sell off to Phoenix happened was to retain the Lloyds mandate

Leave a comment