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Standard Life plans new D2C offering

Standard Life 480

Standard Life plans to develop a direct-to-consumer offering for less wealthy consumers to capitalise on increasing customer numbers due to auto-enrolment.

Speaking at a media briefing last night in London, Standard Life managing director of adviser and investments Richard Charnock said the death of the bancassurance model and the number of people who would no longer get advice from traditional providers such as banks meant it was “quite obvious providers have now got their eye on the UK advice gap.”

He cited examples of models in the US operated by firms such as Fidelity and Vanguard which managed to bring together workplace, self-serve and advised markets.

Charnock said: “We are under pressure from the Government and the regulator to fill that advice gap, so we will be building something in due course that takes us into that space.”

Asked by Money Marketing how such a model would work given Standard’s Life adviser focus, Charnock stressed the business was an intermediated business and would continue to be.

He said: “This is about capturing the opportunities through auto-enrolment as much as anything else. We are not entirely sure how many auto-enrolees will come through Standard Life over the next three years but it could be as many as 400,000 people in schemes who are becoming customers of Standard Life.

“Through a process we will work out who is advised and who is not, and for those that are not, if there is something that engages them through a self-serve proposition at the lowest level, perhaps selecting an Isa through us, that creates a pool or a franchise if you like that can then be referred over to our IFAs. Suddenly, IFAs that partner with Standard Life can see the benefit of future referral business coming their way.”

Charnock said the company would never go down the advice route itself, and hit out at suggestions that rival provider Aviva was looking at selling to its legacy customers.

He said: “We think that is outrageous, the back book is only with them because it was intermediated and introduced by an IFA. That is certainly not our strategy at all.”

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Comments

There are 8 comments at the moment, we would love to hear your opinion too.

  1. Std Life are not the intermediaries friend. This reinforces the point. Where are they getting these Auto Enrolment clients from? Yes, us. And then they want their D2C outfit to capitalise on the increasing customer numbers – our customers. I await similar announcements from Scottish Widows.

  2. I agree with anonymous. Standard Life are constantly looking for ways to take IFA clients away from us. They send letters direct to clients under the psuedo reason they have a duty to inform, They are under the mis-apprehension our clients are theirs, just because we have placed them with Standard Life. They never put our names on their letters, but display their contact telephone number in BOLD print.
    Unfortunately they have become a very greedy commercial organisation, as far as IFA’s are concerned. RDR has given them an opportunity to cut us out of the picture with clients, and they exploit it ruthlessly.

  3. Arthur Salmond 14th June 2013 at 3:39 pm

    Once upon a time a Giant broke free of his chains to commit the final betrayal. The feeders were outraged but the other giants looked on enviously realising they could now release their longtime secret plans.

    As the newly energised giants sat round their magic table imagining the riches they could now create they laughed out loud remembering how for years they pretended they never would until finally abandoning the need to have feeders when it was easier and cheaper to do it themselves to talk to the people.

    Thank goodness that big nasty Giant was brave enough to speak the truth. For now we are free, the people are happy.

    Meanwhile the feeders did nothing. They wrote to one another, they moaned when they met and talked about the good old days when they were given back the scraps from the giants and failed to love the people who fed them.

    The Giants and the people lived happily ever after. The feeders were never, still are not and will never be happy.

    The End (as you know it)

  4. This is an obvious development and more will follow SL and Aviva who have made the same announcement. Lets face it AE has meant that distribution channels are not as necessary as they once were and so product providers will go direct to the end customer.

    Oddly enough though its companies who AE offering is presumably failing miserably to land new name business who want to secure their legacy book?!?

  5. John Blackmore 14th June 2013 at 4:44 pm

    Is anyone surprised ? I have long believed that only 5% of the pre-RDR market required ( and could afford to pay for) complex Independent Financial Advice.

    The mass market ( 95%) could be served by the Banks, by Insurance Companies, Execution Only Internet Services or by Simplified Products Direct Sales people.

    The public will be happy. Shame about the newly qualified Q level 4 people who thought they had a viable commercial future.

  6. Good luck with AE, for my part there is no desire to be involved in chasing that type of business until the dust has settled and the wheat has been sorted from the chaff and then, granted, it will be too late for much new business, but there will always be poorly serviced schemes to inherit!… That’s how you deal with the ‘giants.’

    I will just look after the clients that I already have where AE is concerned and wait for the rest; why give yourself more problems than you need?

    The reason that we moan (see above writer) is because we know that we will ultimately be proven correct and it is tiresome to see people taking us headlong into problems through rationale which is invariably linked to greed and short term gain.

    That is precisely why the industry has the issues which it does, because of some of the pile ’em high sell ’em ‘cheap’ merchants, who ultimately fail to establish the right kind of relationship with their public, so when a problem arises, there is little to no personal accountability and ownership of it.

    Whatever the future delivers, this industry will always need its most valued asset…Good advisers…Whether people can afford it or providers can survive in the new environment, is another thing, but trying to take market share from established relationships will not provide the answer to their woes!

  7. We’ve seen it all before. Direct sales, then through intermediaries – back and forth like the Hokey Kokey.
    Life offices always were and still are appallingly run organisations. When I entered this field in the 1980’s after being in industry and dealing with the likes of Bayer, Hoechst, ICI, Shell etc. I just couldn’t believe the ineptitude of the large life assurance firms. In over 20 years I have seen nothing to change my mind.
    I pity the poor people who put their hard earned money into those hands.

    (Oh and if Mr Richards of the CII reads this – yet another example of what I was referring to).

  8. If anyone thinks Standard and Widows are the only ones planning something on the D2C front then they’re in for a rude awakening!

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