Closed life and pension fund consolidator Phoenix Group, owner of the “old” Edinburgh-based Standard Life Assurance, said on Tuesday it will take ownership of the Standard Life brand from asset management giant Standard Life Aberdeen (SLA) and sell back to SLA some of the investment and platform-related products it previously bought.
As part of Tuesday’s announcement, the asset management partnership of SLA and Phoenix will be extended to at least 2031 — the original arrangement was up to 2028.
Standard Life Aberdeen currently manages about £147 billion for Phoenix, which said it will receive £115 million as a result of Tuesday’s announcement.
Standard Life Aberdeen will now change its name, with an SLA spokeswoman saying it has “initiated a branding review” — the outcome of which will be announced later this year.
“It will include all client facing businesses and the publicly listed company,” added the spokeswoman.
Standard Life Aberdeen said its “beneficial” shareholding in Phoenix Group remains 14% and that it retains the right to appoint a director to the Phoenix Group board.
“Given the strength of the partnership that is being created to focus on growth, Standard Life Aberdeen continues to view its shareholding in Phoenix Group as strategic,” said SLA.
Phoenix Group CEO Andy Briggs said: “I am delighted that Phoenix now owns all of the Life and Pensions business of Standard Life, including the brand and all distribution and marketing, and we are committed to investing in this business.”
Standard Life Aberdeen sold Standard Life Assurance Limited to Phoenix Group Holdings for £3.2 billion in August 2018.
Standard Life Aberdeen CEO Stephen Bird said: “This agreement builds on the strong foundations of our long-standing relationship with Phoenix and the simplification of our Strategic Partnership enables both groups to focus the partnership on the provision of Standard Life Aberdeen’s high-quality asset management services to Phoenix and its customers.
“I am also delighted that Phoenix has agreed to extend our Strategic Asset Management Partnership until 2031 and believe this is testament to the expertise and excellent service ASI (Aberdeen Standard Investments) delivers as a leading asset manager.
“Given the growth ambitions of the Strategic Partnership, SLA remains committed to its strategic investment in Phoenix and I look forward to continuing to work in partnership with Andy and his team in the years ahead.”
Phoenix said in a statement: “Following the acquisition of Standard Life Assurance Limited (SLAL) from Standard Life Aberdeen plc (SLA) in 2018, Phoenix Group and SLA entered into a strategic partnership to advance the interests of both businesses.
“At the same time SLA became a leading shareholder in Phoenix and today has a strategic shareholding of circa 14%.
“Phoenix and SLA are pleased to announce that they have entered into a new binding agreement which significantly simplifies the arrangements of their Strategic Partnership, enabling Phoenix to control its own distribution, marketing and brands, and focusing the Strategic Partnership on using SLA’s asset managementservices in support of Phoenix’s growth strategy.
“Under the terms of the transaction, Phoenix will sell its SLAL UK investment and platform-related products, comprising Wrap Self Invested Personal Pension (Wrap SIPP), Onshore Bond and UK Trustee InvestmentPlan (TIP) to SLA, and acquire ownership of the Standard Life brand.
“As a result, the Client Service and Proposition Agreement (CSPA) entered into between the two groups in connection with the acquisition will be dissolved.
“At the same time, Phoenix is reinforcing its Strategic Partnership with SLA by re-committing to a 10-year strategic asset management partnership, with Phoenix harnessing Aberdeen Standard Investments’ (ASI) expertise across a breadth of portfolio management and investment strategy areas.
“Ownership of the Standard Life brand is a key enabler for delivering Phoenix’s Workplace and Customer Savings and Investments (CS&I) growth strategies at pace.
“The relevant marketing, distribution and data team members will transfer from SLA to Phoenix ensuring that Phoenix has full discretion over marketing and communications.
“This will support the delivery of a more cohesive experience for customers, clients and their advisers.
“By investing in the Standard Life brand, Phoenix will accelerate the delivery of a broader set of product and service propositions and be better positioned to take advantage of opportunities arising through the shifting landscape of the long-term savings and retirement market.
“Phoenix will continue to partner with SLA to design and provide investment solutions for its customers.
“Through this transaction, Phoenix will receive £115 million of cash consideration, ownership of the Standard Life brand, and Phoenix and SLA will resolve all legacy issues in relation to the Transitional Services Agreement entered into in connection with the acquisition (TSA) and the CSPA.”