‘Vultures are circling’ as Standard Life eyes Elevate deal


Advisers will face uncertainty and the prospect of being targeted by rivals if Standard Life completes a mammoth takeover of Axa Wealth’s platform Elevate.

Last week, Bloomberg reported Standard Life was in high level talks to acquire the French insurer’s platform after Money Marketing revealed in September Axa Wealth was up for sale.

Standard Life chief executive for UK and Europe Paul Matthews would not confirm whether an offer has been made but told Money Marketing: “There are something like 30 platforms in the UK today and all the evidence suggests that’s not sustainable.

“In the long term we think there will be five platforms. I’m not sure enough companies are investing enough money to keep their platforms where they should be in the next five or 10  years.”

Experts say a merger – which would see the combined platform ranked third for assets under administration – will be extremely costly for Standard despite FNZ providing the technology underpinning both platforms.

Finalytiq founder Abraham Okusanya says: “Both platforms are largely powered by the same technology from FNZ, but the user interface, functionality and pricing are obviously very different. The biggest challenge would be what Standard does with the business.

“Migrating would be a very hard and painful process for advisers and a big risk for Standard because the moment the deal is agreed, like vultures circling their prey, other platforms will begin to target advisers on Elevate to move assets rather than wait around to go through a potentially painful migration process.

“Off course, Standard could effectively keep Elevate as it is – perhaps just rebrand it and gradually encourage advisers to migrate assets over to Standard Life but this is potentially costly and will only be made worse by a vulture-prey scenario.”

But Platforum senior researcher Miranda Seath says Standard Life would be an “ideal buyer”.

She says: “The culture and profile of Standard Life is a good fit for Elevate. And it is unlikely to upset the apple cart for Axa’s adviser users.

“Nevertheless, if Standard Life acquires Elevate, it won’t be gaining access to new or better functionality, or a different profile of user base. Integration is time-consuming and potentially costly. Standard Life’s net sales are currently flying and an acquisition at this point could be a distraction. On balance it is hard to see the rationale – but the price may just be right.”

Page Russell director Tim Page says: “Standard Life will be under lots of pressure from the FCA to make sure Axa people are treated fairly. They’ll be on it like a rash in terms of letting customers move if they want to.”

Axa Wealth has been tight-lipped over a prospective deal and it is unclear which parts of the business – which includes the platform, Sipps, onshore bonds, corporate pensions and investment arm Architas – is up for sale.

He says: “It will be interesting to see what happens if Standard only buy the platform and not Architas. At the moment customers get discounts on Architas funds – how will they unbundle that? That will be the key issue.

He adds: “Advisers will have to have conversations with competitors and people with money on Axa might decide to move. If Standard turned around and said 99 per cent of the assets are now with us, I’d be worried about the kinds of restrictions they have put on them.”

According to Platforum, a combined platform will have assets totalling £37bn, putting it behind FundsNetwork at £62bn and Cofunds at £77bn. The three platforms’ assets are boosted by huge amounts of institutional money.