STANDARD Life is poised to slash almost a third of jobs from its independent financial adviser support unit, according to the Scotsman this morning.
The paper says the Edinburgh-based insurance giant yesterday announced the move to more than 50 affected staff, following a briefing to senior managers on Monday.
It plans to cut 53 jobs from its IFA support team – 30% of the 177-strong department, which is spread throughout the UK.
In an official "business guide" obtained by the paper, Paul Matthews, director of intermediary distribution at Standard Life, attributed the reduction to a fall in the volume of quotes requested.
The group will form a centralised "sales quotes centre" in Edinburgh, with 39 new staff. Those facing redundancy will be able to apply for redeployment.
The news overshadowed two key appointments at Europe's largest mutual, as it prepares to demutualise this summer. Standard said yesterday it would strengthen its finance team, with a new investor-relations director and group internal audit director - crucial roles in the run-up to flotation, as it vies to woo the City.
The latest job cuts come after Standard Life made fundamental changes to its business model: it has ceased writing loss-making business at the expense of market share, instead focusing on more profitable business streams.
The stark departure from a traditional life assurance "business accumulation" model has seen it turn its back on regular-premium business - the with-profits policies and personal/group pensions once at its core - in favour of more lucrative single-premium products, including self-invested personal pensions and wrap products, which have their own dedicated sales units.
Matthews said that delivering sustainable growth was a "challenge in a very competitive marketplace that continues to change at a fast pace". The change in "business mix" and popularity of "self-service" quotes had led to a drop in demand at its regional business centres, he said.
"With the removal of quotes work, the IFA support head count will reduce and, consequently, there will no longer be an need for the same level of management supervision or business centre support," said Matthews. "These changes will enable us to reduce our cost base, which will help us to compete in what is already a competitive marketplace."
The job cuts - which include all five managers and will come in three phases, from 21 July to 17 November - follow the first redundancy programme in Standard's history, which saw it shed 3,500 jobs over two years from 2004.
They come as the company said new investor relations director Gordon Aitken, and internal audit director Paul Watts, would join the company on Monday.
Aitken, who previously worked as an equity analyst for JP Morgan, will take over from Amanda Forsyth, who made a shock departure in November last year under a shake-up led by new finance director Alison Reed.
He will be responsible for selling Standard Life to institutional investors and analysts, as the group tries to create a clamour for its shares. Reed said he and Watts brought "very strong skills and relevant experience", which would be "extremely valuable as we move towards becoming a plc".
FRIENDS PROVIDENT is preparing to launch a southern Asian business after winning a sought-after licence to set up a branch in Singapore, the region’s wealth-management capital, the Times reports.
The paper says it will be the third-largest British insurer to make a play for the estimated $7 billion (£3.7 billion) currently held in deposit accounts and cash by Asia’s emerging middle class.
Keith Satchell, its chief executive, will tell a conference of analysts and investors today that he hopes to open the business in September and aims to sell in Thailand, Indonesia and Malaysia as well as in Singapore itself.
Analysts are expected to welcome the announcement. The City is keen for insurers to demonstrate where they will look for growth outside the mature UK market.
Interest in Asia as a market reached fever pitch in March when Aviva, Britain’s largest insurer, made a £17bn bid for Prudential, its nearest rival, largely to get hold of the Pru’s established Asian business.
The paper quotes Satchell as saying: “Singapore absolutely suits the way we do business — it’s a well-developed market, but, unlike the UK, has very dynamic growth prospects.”
The new branch will be run by Friends Provident International (FPI), the insurer’s offshore business based in the Isle of Man. FPI, which Friends Provident renamed after acquiring the business from Royal & SunAlliance in 2002, has operated in Hong Kong for about 15 years. The Hong Kong business sells products in Taiwan, Japan and South Korea through financial advisers based in Hong Kong itself.
Last month analysts at Credit Suisse praised FPI, which contributed 15 per cent of the group’s new business sales last year. The bank said that the unit provided “excellent diversification from a competitive and lower-growth UK life market”.
Unlike Prudential and Aviva, the other UK insurers that compete strongly in Asia, Friends Provident will sell solely through financial advisers.
Satchell said that he would look for affinity deals in Asia similar to the agreements that FPI holds in the Middle East with the National Bank of Abu Dhabi and Riyadh Bank.
In addition, he plans to launch a product that currently does not exist in Singapore — a personal portfolio bond aimed at high-net-worth individuals that allows tax- privileged investment in a number of assets.
If you have any comments you would like to add to this story or would like to speak to its author about a similar subject, telephone Matthew West on 020 7484 9893 or email [email protected].IFAonline
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