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Standard is set to reveal bank and adviser tie-ups

Multi-ties are top of Standard Life’s Christmas list, with the firm set to reveal deals with at least one bank and a number of IFAs in the new year.

Standard, which unlike rivals Prudential and Norwich Union, has yet to announce any multi-tie arrangements, will unveil its distribution tie-ups in the first half of 2005.

UK life and pensions chief executive Trevor Matthews, speaking exclusively to Money Marketing in his first interview since taking over his new role, says the number of multi-ties will depend on the size of the organisations and whether or not the deals are exclusive.
He does not rule out buying into an IFA firm but says there are no current plans.

Matthews says: “We have traditionally focused on IFAs and they will be our main distribution channel for decades to come but we do have a lot to offer other distribution channels and I would be amazed if we do not have a bank tie-up by the new year.

“It could be one big deal or several little deals or somewhere in the middle. The focus is more on quality than quantity.”

He says the group’s directsales office, which has been trimmed down over the past 12 months, will remain an important strand of Standard Life’s distribution.

The firm is changing what it calls its rules of engagement with customers and this has led to the direct salesforce being the group’s fastest-growing distribution channel.

Whereas previously, Standard’s modus operandi made it very difficult to deal with customers except through an IFA, there is a growing recognition that it is uneconomic to turn away non-intermediated business purely because of its origin.

Matthews says: “Direct is growing most quickly and most successfully relative to our revised plans. The direct salesforce previously had a lack of access to different products but fund platform Sigma has given them more optionality.”

Despite this, he still expects sales to slow next year, in part due to demutualisation and in because of regulatory change in the pension market but he says this will only be a short-term blip and he believes the firm will be in a very strong position from the second half of next year.

Matthews, who joined Standard from Manulife six months ago, says the bulk of his time is being spent on product development for 2005, with the firm looking at launching a wrap service next year and potentially a non-stakeholder personal pension to sit alongside its Sipp and stakeholder offerings.

Standard is also re-entering the protection market next year and looking at working more closely with sister company Standard Life Bank.

The wrap is Matthews’ main focus. He says he is keen for Standard to move further away from its old guise of pension and with-profits specialist to a broad-based product and service provider which almost necessarily pushes it towards launching a full wrap.

That said, the choice of tax wrappers underpinning the wrap service needs to be comprehensive if the service is to be a one-stop shop for IFAs. With stakeholder sales limp and the firm potentially taking a risk by focusing too heavily on its Sipp for the personal pension market, Matthews admits Standard is looking closely at launching a non-stakeholder personal pension.

Matthews concedes that the outlook for with-profits sales is “not spectacular” but he still believes that smoothed products have a place in the market. If demand for with-profits variants such as Prudential’s Prufund prove strong, he says Standard could look at rolling out a version of its ring-fenced stakeholder with-profits fund to the wider market.

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