Standard Life launches financial advice arm

STANDARD Life is to launch a UK-wide financial advice business after it agreed to buy the wealth management arm of Skipton Building Society, and pledged that more deals will follow as it seeks to build up the division.

Standard Life HQ on Lothian Road, Edinburgh. Picture: Neil Hanna

The life and pensions group said the acquisition of Yorkshire-based Pearson Jones, for an undisclosed sum, is expected to bring with it assets under advice of £1.1 billion.

“The growth of the advice business will be accelerated through the acquisition of progressive financial advice firms which align well with our operating model,” the insurer said.

“This will enable Standard Life to tap into the proven expertise and professionalism in the advice market.”

Pearson Jones, set up more than 40 years ago, has offices in Bishop Auckland, Leeds, Reading and Sheffield. The firm employs more than 100 people, including 39 advisers and paraplanners.

Edinburgh-based Standard Life said the advice arm will be headed by Steve Murray, who was “instrumental” in the development of its advice and distribution strategy. The deal comes amid “unprecedented” customer demand on the back of changing pension rules that will end the need for people to buy annuities with their retirement savings.

Rival Scottish Widows, owned by Lloyds Banking Group, last month said it would take on about 400 extra temporary workers ahead of an expected rush of enquiries as “pension freedom” changes come into force in April.

The staff are being drafted in to give customers information about the new rules, which will include the ability for those aged over-55 to take their entire pension pot as a cash lump sum.

Standard Life said its service would deliver advice face-to-face, over the phone and through digital services and pledged to actively recruit and train people for a career in financial advice through the creation of an “academy”.

Customers will be able to buy funds from a range of providers using Standard Life’s platform, and the firm will offer a panel of companies from which clients can buy life insurance.

The group has previously owned stakes in independent financial advice networks such as RSM Tenon and 2plan, but a spokeswoman said the formation of its own advice operation was a first for the group.

Managing director Barry O’Dwyer said: “As a leading long-term savings business in the UK, this is an exciting next step for Standard Life. We already help millions of customers to save through the workplace and are a leading provider to the highest quality firms in the advice sector.”

Pearson Jones managing director Tim Johnson said: “Pearson Jones’ management and staff are excited to be joining Standard Life to help build a ‘best-in-class’, nationwide financial advice business. Standard Life’s focus on enhancing client service and improving the career prospects of our staff makes this a very good step in our 40-year history.”

The deal is due to complete in the second half of the year, subject to regulatory approval, and comes just days after Standard Life completed the sale of its Canadian operations to Manulife.

The disposal will trigger a £1.75 billion windfall for the group’s investors, who are expected to receive a payout of 73p a share before 6 April. Standard Life has about 1.3 million retail investors, and the return of capital will average £491 for with-profits policy­holders who were given shares when the insurer demutualised in 2006.