Phoenix and Standard Life Aberdeen enter new binding agreement

Phoenix Group and Standard Life Aberdeen (SLA) have entered into a new binding agreement with the aim of simplifying their strategic partnership.

In 2018, Phoenix acquired Standard Life Assurance Limited (SLAL) from SLA, with the two firms entering into a strategic partnership and SLA becoming a leading shareholder in Phoenix.

Under the new agreement, Phoenix will receive ownership of the Standard Life brand, which it currently uses under licence, resulting in the end-to-end experience of SLAL customers being managed solely by Phoenix.

The ownership of the brand was described by Phoenix as a “key enabler” for delivering its workplace and customer savings and investments growth strategies “at pace”.

Relevant marketing, distribution and data team members will transfer from SLA to Phoenix, ensuring that Phoenix has full discretion over marketing and communications.

Phoenix has re-committed to a 10-year strategic asset management partnership with Aberdeen Standard Investments (ASI) by extending core components of the partnership for a further two and a half years, from August 2028 to February 2031.

SLA will purchase Phoenix’s SLAL UK investment and platform-related products under the terms of the transaction, which includes Phoenix’s wrap self-invested personal pension, onshore bond and UK trustee investment plan, for £62.5m.

The sale of the investment and platform-related products is planned for late 2022.

As a result, the Client Service and Proposition Agreement the firm’s entered into with the acquisition in 2018 will be dissolved.

The economic risk and reward in these businesses will transfer to SLA with effect from 1 January 2021.

All legacy issues in relation to the Transitional Services Agreement between Phoenix and SLA will be resolved, with Phoenix paying SLA £34m to settle the matters.

Meanwhile, SLA will pay Phoenix £32m in return for Phoenix bearing the cost of some colleagues, who are transferring.

Going forward, SLA will no longer provide marketing services to Phoenix.

“This agreement is a natural progression of our strong strategic partnership with SLA and significantly simplifies our relationship,” commented Phoenix Group CEO, Andy Briggs.

“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.

“This will enable Phoenix to accelerate the delivery of a broader set of product and service propositions to meet the financial needs of our customers as they journey to and through retirement.”

SLA CEO, Stephen Bird, added: “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 SLA’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 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.”

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