(Alliance News) - Standard Life Aberdeen PLC on Tuesday said it has simplified and extended its strategic partnership with fellow FTSE 100 constituent Phoenix Group Holdings PLC.
The strategic asset management partnership - under which Standard Life Aberdeen manages around GBP147.4 billion of Phoenix Group assets - will be extended and will now operate until at least 2031.
Standard Life Aberdeen will buy the Wrap SIPP and Wrap Onshore Bond businesses from Phoenix, to bolster its offering for its UK financial adviser clients in the form of its Wrap and Elevate platforms, and will also acquire the TIP business from Phoenix - the upfront cost of all this being GBP62.5 million, though this is expected to be offset in part by expected payments from Phoenix relating to the profits of the business prior to completion of the legal transfer.
Meanwhile, Standard Life Aberdeen will sell the 'Standard Life' brand to Phoenix Group during the course of 2021. Phoenix Group will invest in the brand and accelerate delivery of product and service propositions more ale to take advantage of opportunities presented by "shifting landscape of the long-term savings and retirement market".
The new agreement follows the 2018 sale of Standard Life Aberdeen's UK and European life insurance business to Phoenix Group. The sale meant that Standard Life Aberdeen was able to streamline its operations, but "created a complex network of commercial and operational services between the groups".
This complexity was especially clear around "certain pensions and saving products" as well as shared use of the 'Standard Life' brand.
Phoenix Group is to receive GBP115 million in cash along with brand ownership, and the two firms "will resolve all legacy issues in relation to the transitional services agreement entered into in connection with the acquisition" as well as the client service and proposition agreement between the two firms.
Standard Life Aberdeen has initiated a branding review, the outcome of which it will announce later this year.
Standard Life Aberdeen Chief Executive Stephen Bird said: "The 'Standard Life' brand has an important heritage. In the UK, it has strong recognition as a life insurance and workplace pensions brand. This is closely aligned with Phoenix's strategy and customer base. This is much less the case with the business we are building at Standard Life Aberdeen, which is focused on global asset management, our market-leading platforms offerings to UK financial advisers and their customers, and our UK savings and wealth businesses.
"That's why I am excited about the work we are doing on our own brand, which we look forward to sharing later this year."
Phoenix Group CEO Andy Briggs said: "I'm delighted with today's announcement and the extension of our strategic asset management partnership with Standard Life Aberdeen until at least 2031. This recognises the global expertise and excellent service that Aberdeen Standard Investments delivers to Phoenix Group and our customers as our preferred asset management partner. The simplification of the Standard Life brand, sales and marketing will be a key enabler of Phoenix's growth strategy, which in turn should lead to greater asset flows to ASI."
Standard Life was founded in 1825. In 2017, it merged with Aberdeen Asset Management to become Standard Life Aberdeen. In 2018, Standard Life Assurance Ltd became part of the Phoenix Group.
Shares in Standard Life Aberdeen were up 0.8% at 328.90 pence in London on Tuesday morning. Shares on Phoenix Group were up 0.5% at 713.80p.
By Anna Farley; annafarley@alliancenews.com
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