It has been a busy start to the year for Standard Life. First came the stooshie over its “threat to quit to Scotland”. Then came last week’s shake-up in the the pensions industry. Now the company is poised to announce a chunky acquisition.
While the first is driven by unknown factors, the other two have ramifications for how it does business and how the company will change.
George Osborne’s revolution in the annuities market, announced in the Budget, was a genuine surprise. Some reform was expected but none of the big financial houses had an inkling of what he really had in mind.
There is now talk of the annuities sector being in meltdown, that the big providers will see their business shrink by as much as 90 per cent. One way or another this will have an impact on the savings industry, though the insurers will not allow it to erode their business without a fight and new products will follow to ensure pensions money keeps rolling in.
Standard Life has only a small percentage of its business in annuities so it will adapt more easily than peers such as Legal & General and Royal London which are big sellers.It might even open avenues for savers to put their money into other schemes. Significantly, the company has stopped thinking of itself as an insurer, preferring to describe itself as a long term savings and investments company. It is big on self-invested personal pensions and individual savings accounts.
But it was the second development in the last few days – a likely acquisition of Glasgow-based Ignis Asset Management – that may prove the biggest influence on its future. This represents a further shift in the dynamics of the business away from life and pensions products towards being a “manager of people’s money” and to that extent moves Standard Life Investments into a more prominent role within the group.
If the deal comes off, at around £430 million and probably in cash, then it will add £68 billion of funds to an existing pot of £184bn and a total group figure of £244bn. A growing proportion of this total is in third party funds, indicating another broadening of its base.
Phoenix wants to offload Ignis and could announce a deal tomorrow (wed) alongside results which would help it cut its debt load.
While it is likely to earnings enhancing for Standard Life it won’t be such good news for Ignis’s 230 Glasgow staff, many of whom may be sacrificed.
Male icons inspire growth in salons
HAIR and beauty salons are usually categorised among non-growth “lifestyle” businesses and probably for good reason as traditionally they have rarely embarked on any sort of expansion drive.
Today’s salons, however, are often large chains employing substantial numbers of people and as we report today another 2,100 could be added to their number.
It’s apparently down to men wanting to groom it like Beckham.