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The teething troubles ahead for Standard Life’s Elevate integration

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Advisers need to watch Standard Life’s integration of Axa’s Elevate platform for signs of teething troubles, experts warn.

Last week marked the completion of the acquisition, which will almost double Standard Life’s customer base, bringing over 160,000 to the business, and raising total numbers to 350,000.

But while the integration at a technology level should be “relatively straightforward”, as both platforms use provider FNZ, Informed Choice managing director Martin Bamford says the greatest challenges will come from managing adviser relationships and client experience.

Bamford says: “It’s important to not underestimate the work involved for advisers in demonstrating suitability to clients if they recommend switching platforms as a result of the deal. Moving clients between platforms, even when there is a clear case for doing so, involves a lot of work.”

Engage Insight managing director Chris Davies adds that by now advisers should have already looked at whether the new deal suits their clients’ needs.

He says: “Advisers need to stress test those new propositions looking at client buy behaviour, through to fees and costs.”

“You’ve got a lot of clients sitting on the Elevate platform and they are all going to need a home, so the most important thing is the clients have been bought by an existing business, which is a multinational and has some very good services, which should be able to facilitate a journey where clients will not be affected too much by the transition.”

Altus director Kevin Okell says while the stated strategy is to persist with both platforms, long-term he expects “some rationalisation” in the back-office.

He says: “Interestingly, whilst both platforms use FNZ technology, their operating models are currently different.”

Standard Life adviser and wealth manager propositions head David Tiller told Money Marketing there is “no reason” for advisers to abandon Elevate after Standard Life completed its acquisition. Experts previously said Standard Life could lose up to one third of Elevate’s assets through the deal but Tiller dismissed such predictions.

While Standard Life has not yet made a decision about fees, Standard Life is reviewing what deals Elevate had in place with advisers and how to administer those after the integration depending on the version of pricing offered.

Bamford expects the Elevate pricing to be reviewed, as it was loss making for the old owners and would undercut Standard Life Wrap in most cases.

He says: “Where advisers have special deals with Elevate, it will be interesting to see if Standard Life is prepared to honour these or risk a sizable portion of the book they acquired migrating away to cheaper competition.”

Page Russell director Tim Page says: “One of the reasons we didn’t go with Elevate is because of the deal with Standard Life. We didn’t think that was going to be a fair deal for our clients especially on charges as not transparent.”

Standard Life: Pricing analysis is underway

Analysing the commercial contracts the Elevate business has in place, including those with advisers, is normal practice in an acquisition of this nature. It is impossible to run a sustainable business without fully understanding the commercials of the business. Understanding the position is therefore essential to good corporate governance.

Pricing models are only one part of our analysis with the main focus to gain a deep understanding of what Elevate advisers are looking for from their platform service. We are keen to continue working with all Elevate advisers and want to protect and enhance the platform service they receive.

This analysis will not take long. While I understand that advisers are keen to know the outcome it was simply not possible to analyse data that we did not have. It was only at completion that legal constraints were removed and Standard Life was given access to the data required to kick off the analysis. I expect to be able to update advisers on our plans in early December.

David Tiller is adviser and wealth manager propositions head at Standard Life

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Comments

There are 2 comments at the moment, we would love to hear your opinion too.

  1. 2 minutes of my life ill never get back

    I suppose that is a bit unfair, take out the comments by Bamford, Davies and Page and its not a bad article.

    If anyone can tell me why you need to stress test a new deal when there isn’t one, just the current deal, i’m all ears!

  2. Platform profitability is key if survival is to be assured. Elevate was loss making and so was disposed of. Standard Life stands to benefit from economies of scale but they do not control the technology. This must be a fundamental flaw in their proposition particularly as SL have repositioned the business around the wrap portal. It will be interesting to see what the retention levels are among former Elevate advisers. I am sure I read somewhere that Transact now receive 45% of all new platform inflows…………….is there a message in there?!!

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