uniquely positioned in the uk investment savings market · 2015-10-14 · uniquely positioned in...

Uniquely positioned in the UK

investment savings market

2Uniquely positioned in the UK investment savings market | Spring/Summer 2015

This presentation may contain certain “forward-looking statements” with respect to certain of Standard Life's plans and its current goals and expectations relating to its future financial condition, performance, results, strategy and objectives. Statements containing the words “believes”, “intends”, “expects”, “plans”, “pursues”, “seeks” and “anticipates”, and words of similar meaning, are forward-looking. By their nature, all forward-looking statements involve risk and uncertainty because they relate to future events and circumstances which are beyond Standard Life's control including among other things, UK domestic and global economic and business conditions, market related risks such as fluctuations in interest rates and exchange rates, and the performance of financial markets generally; the policies and actions of regulatory authorities, the impact of competition, inflation, and deflation; experience in particular with regard to mortality and morbidity trends, lapse rates and policy renewal rates; the timing, impact and other uncertainties of future acquisitions or combinations within relevant industries; and the impact of changes in capital, solvency or accounting standards, and tax and other legislation and regulations in the jurisdictions in which Standard Life and its affiliates operate. This may for example result in changes to assumptions used for determining results of operations or re-estimations of reserves for future policy benefits. As a result, Standard Life’s actual future financial condition, performance and results may differ materially from the plans, goals, and expectations set forth in the forward-looking statements. Standard Life undertakes no obligation to update the forward-looking statements contained in this presentation or any other forward-looking statements it may make.


Simple and consistent business model


Scale of growth opportunity is significant


Discounted

share classes “2016 ready”

UK Platform of the Year

Fully automated AE

New D2C ISA

Introduction of RDR

End of commission

Launched “Good to

Go” Auto enrolment

commenced

MyFolio launched

Focus Solutions

acquired

Vebnet acquired

Auto enrolment

announced

RDR

announced

Uniquely positioned during a period of

unprecedented change and growth

2004

Non-commission

model adopted

Launched our

SIPP

2006

IPO

Launched Wrap

2007

2008

2010

2012

2013

2014

2015So far….

Launch of UK Financial

Adviser business

Acquisition of Pearson Jones

Launch of Discretionary Plus

#ReadyWhenUAre To come….

Pension freedoms

ready

Flexible Drawdown

2015


2014 budget creates further opportunities in

the investment savings market

Growing demand for long-term saving propositions • Customers like flexibility offered by pension

freedoms• Encouraging higher saving rates – annuitisation

deterred many from saving in pensions• Assets should become invested for longer - well

into retirement

Standard Life leadership in long-term savings propositions• Leading provider of workplace pensions• Our Wrap is the leading platform in the advised

retail market• New direct advice and online proposition being

launched

Many providers lack flexible pension/drawdown capability• Ability to serve customers across the industry

will be tested

Standard Life strength in flexible pensions/drawdown• We are the UK leader in Self Invested Personal

Pensions and drawdown with AUA of £26bn including £11bn in drawdown

Investment solutions will be even more important• Customers will look to limit volatility in

retirement

Standard Life strength in investment solutions• We have a leading range of multi-asset

investment solutions, including MyFolio and GARS


Leading provider of DC pensions in the UK

UK fee business assets over £100bn

£22bn

2011 2012 2013 2014

£25bn

£29bn

£32bn

• 10% increase in net inflows to £2.2bn

• 16% increase in regular contributions to £2.7bn

• 1.6m customers (360,000 new customers in 2014)

Retail business

benefiting from a leading adviser platform

£24bn

2011 2012 2013 2014

£29bn

£34bn

£37bn

Stable book of mature business

£32bn

2011 2012 2013 2014

£32bn£34bn £34bn

• 4% increase in net inflows to £2.9bn

• 48% increase in MyFolio AUA to £5.9bn

• c25% of Wrap AUA managed by SLI securing additional revenue margin for the group

• 15% reduction in net outflows to £2.2bn

• Stable mature book of business benefiting from transfers of leavers from workplace

• Provides steady flow of customers for retail new propositions

1. Comparatives have been restated to reflect Standard Life Wealth now being reported as part of Standard Life Investments.

Reta

il ol

d AU

A

£20bn

£40bn

Reta

il ne

w A

UA1

£20bn

£40bn

Wor

kpla

ce A

UA

£20bn

£40bn


Lowering unit costs

1. Calculated as acquisition and maintenance expense as a proportion of average AUA2. Excluding the £17m HWPF adjustment

30%

reduction in

UK unit costs

since 2011

Driven by

market

growth and

efficiencies

Ongoing reduction in unit costs1

`

2011

57

49

2012 2013

43

30bps

60bps

2014

402


Evolving customer needs

Growing UK customer numbers and increasing

engagement to drive asset growth and margin

Of

which

needing

Advice

1.1m

All UK

customers

3.9m

Cust

om

er

en

gagem

en

t

Cust

om

er

lif

eti

me v

alu

e t

o U

K a

nd S

LI

Serving our customers

and driving margin

Workplace

Online

savings

Advice

• Entry point for new customers

• Low cost of acquisition• Largest DC provider in UK

• Consistent look and feel• Easy access, tools and guidance • Greater take up of SLI solutions

• Face to face, online or over the phone advice

• Greater take up of SLI solutions

• Auto enrolment• DB to DC shift• Savings gap

• Increasing demand for interactive online solutions

• Simple, easy to use

• Complex financial needs• Pension freedom from April 2015• Advice gap post RDR

Of which

actively engaged

3.2m


Accumulation / building savings

Not engaged

Looking for help

Reliant on trusted

adviser

Confident

Our strategy enables us to continue building compelling

propositions to attract and retain customers’ life savings

throughout their life stages

We will build on our extensive existing workplace scheme coverage, leading retirement

and investment solutions and large existing customer base

Retirement

transition

Retirement / managing

savings

Guidance through online capability

Advice through IFAs & Vertically Integrated Advice

Enrolment through Workplace

Self-managed

Nature of customer ->Level of engagement


Growing new customers

UK workplace: attracting high number of new

customers

Largest provider of DC pensions in the UK • 1.6m workplace customers with AUA of £32bn

Since 2012 over 560,000 new customers through auto enrolment• Now more than 3,000 schemes auto enrolled• Accessing a younger customer demographic – opportunity to

create life-long customer relationships• Lower than expected auto enrolment opt-out rates being 7.6%• Strong demand for Good-to-Go online solution for SMEs with

Standard Life Active Plus fund as default fund

159k

2011 2012 2013 2014

292k

0k

400k 360k

118k


Auto enrolment:

minimum contribution rates %

UK workplace: opportunities for ongoing

growth

Additional value will come from growth in assets and revenues • Scheme members choosing to consolidate their individual

pensions• Consolidation of company scheme arrangements• Auto enrolment contribution rates increasing from 2% today

to 8% in 2018• DB to DC shift continues as DB schemes continue to close to

future accrual• Move to bundled DC from expensive unbundled arrangements• Increase in future contribution rates required to tackle

savings gap

Workplace is also an important source of growth for the Group• New retail direct customers• Future customers for our advice business• Additional flows into Standard Life Investments

Pre-30 Sept 2017

1 Oct 2017 – 30 Sept

2018

Post-1 Oct 2018

0%

10%

2%

5%

8%

1%2%

3%1%

3%

5%

Employer contributionsEmployee contributions


Engaging all UK customers via our

new digital proposition

Four key customer groups needing help and guidance• Existing direct

customers • Potential new direct

customers (including new retirees)

• Existing workplace customers

• New auto enrolment customers

How we are helping customers through pension changes• Online technology to drive

greater customer engagement:

• New tools to guide customers through the retirement process

• Driving take up of Standard Life Investments solutions

• Enabling consolidation of assets

• Supported by retirement communications and roadshows

• #ReadyWhenUAre campaign


Engaging with our customers


New customer website co.uk

Clear, uncluttered with extensive user testing


Pre-retirement journey

• A quick & easy way for over 55’s to explore their retirement options

• New engaging retirement tools• Simple & clear

Using innovative partners to make our journeys more impactful


Making pension consolidation easy

In 3 easy steps

A simple & fast way to transfer external pension pots into Standard Life


Creating a UK-wide financial advice business

• New advice business will help customers face-to-face, on the phone and online

• Builds on the advice and guidance capabilities of Standard Life Direct and Private Client Management

• Integrated with our other offerings to allow flow of customers between propositions

• Complementary to us remaining a strong supporter of independent/whole of market advice


UK Adviser – Leading Advised Platform

Continuing to grow our market share• Number of firms on Wrap up 8% to 1,340 with AUA up 26% to £20.9bn • 104 new firms added to the platform in 2014 (2013: 99) • Wrap customers 163,690 (2013: 135,336 )

Leading Platform ProgrammeBuilding on its prestigious ‘Platform of the Year 2014’ award win in September, Standard LifeWrap continued to lead the adviser market in Q4.

In March, Fundscape confirmed that Standard Life Wrap was the leading advised platform in the UK for net sales in 2014.

Named ‘Platform of the Year

2014’ by industry experts

Voted ‘Best Platform Provider

(AUM over £12.5 billion)’ by

financial advisers

“….the judges came to a conclusion based

on a proposition that they felt they could

buy as customers, that wowed their many

adviser users, AND, in addition, has had

an absolutely stonking year for new

business growth.”Runner up ‘Best Platform for

Adviser Service’


No.1 adviser platform for new business in 2014

1. Figures sourced from Fundscape Platform Report, Q4 2014 issue

Standard Life

Company1

Company2

Company3

Company4

Company5

Company6

Company7

Company8

Company9

Company10

Company11

Company12

£0m

£6,000m

£5,311m

£3,969m

£4,393m

£694m

£5,011m

£844m£553m£331m

£5,227m

£1,868m

£3,117m

£1,509m £1,483m

£854m

£3,005m

£1,577m

£2,077m

£1,382m£1,619m

£1,033m

£560m£495m

£2,560m

£2,176m

£443m£199m

Net salesGross sales

Company13

£1,944m

£1,441m

Sale

s1,2

Appendix


Continuing growth from the UK business

1. 2013 has been restated to reflect Standard Life Wealth now being reported as part of Standard Life Investments. 2. Institutional pensions managed by Standard Life Investments are now excluded from UK and Europe results. Comparatives have been restated. 3. Excluding investment management fees payable to Standard Life Investments. 4. Excluding £17m HWPF adjustment.

• Workplace and retail new net flows representing 8% and 9% of opening AUA respectively

• Fee based revenue increased 3% in a transitioning market

• Total expenses3 up only 2% to £354m, excluding £17m historical adjustment of HWPF

• Operating expense unit costs down to 40bps4

uniquely positioned in the uk investment savings market · 2015-10-14 · uniquely positioned in...

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