While Standard Life was late to enter the international arena, Trevor Matthews, chief executive of its life and pensions business, is keen to make an impact. Keren Holland reports
Walkinginto the office of Trevor Matthews, with its stunning views of Edinburgh castle, it is clear this is not the workspace of a local man.
Coffee table books on Australia line the window sill, and Matthews, who heads up Standard Life's life and pensions business, is quick to share stories of his homeland.
As a proud Australian who has worked in Canada, Japan and the UK in the last decade, Matthews is a typical example of the mobility of today's workforce, and the opportunities that presents to life companies and advisers.
While Standard Life was slow to enter the offshore market, setting up Dublin-based Standard Life International only last year, it is now moving quickly to seize its share, with the recent relaunch of its International Bond.
Matthews believes there is great potential for the future, with the growing number of people living and working abroad. He says: "It is interesting to sit here in this country and see all the movement. There are all the different permutations and combinations so it can be very hard to find people who can deal with the different jurisdictions.
"There are a number of opportunities to develop our expertise and provide products and services that make sense to people in various situations. Our International Bond is just the first step in that direction."
Pros and cons
Standard Life International is keen to seize a slice of the market and has set a target to be one of the top three companies in terms of offshore sales by 2008.
Matthews admits coming to the international space late has had both its benefits and disadvantages. By the time Standard Life entered the market, it was clear what was successful and what wasn't. However, convincing advisers to choose its product over the competitors has not been easy.
Matthews says: "It's challenging to break into existing distribution relationships and give (advisers) a reason why they should effectively stop selling one product and start selling ours.
"That is a continuing issue for us, and it comes down to the product design, service back-up, the quality of the representation we have, and the responsiveness to that."
Matthews says service is a big issue for advisers and their clients, and claims Standard Life has a good reputation in that area. He adds: "It's not easy to provide good service on a continuing basis and it's not something that will necessarily draw people to you on its own, but it certainly can be a real negative if you get it wrong.
"I think some of the other competitors haven't invested as much (in service), or been as serious about it. We have been able, over the last couple of years, to continue to improve service and reduce costs. So service is an important component of our offering."
Matthews joined Standard Life in July 2004, from Manulife, a life insurance company that he headed up in Canada, and then Japan.
He has had a long career in financial services, starting with Legal & General in Australia where he remained for 26 years.
Working up through the ranks, he was made managing director in 1989, heading up the company for seven years.
He then joined National Australia Bank, where he was in charge of retail banking, plus the financial planning aspects of the business.
Matthews says the financial services industry Down Under is an interesting one, developed on the Aussie attitude of getting stuck in. "There has been quite a lot of innovation there. The Australian attitude is to have a go, don't analyse things too much. Sometimes it works and sometimes it doesn't but if you keep accumulating that you get more change," he says.
While working in Australia, Matthews often came up with ideas while sitting on a long haul flight from the UK or US. Having seen innovations in those countries, he had plenty of time to think about how they could be applied Down Under. He says: "You sit on the plane for 24 hours home and think, 'geez, why don't we give that a go?'
"You get back to Sydney or Melbourne and sit round the table and say, 'listen, I have seen this, what do you think?', and the others will say, let's have a go. As a result there has been a lot of innovation and change.
"Australia is an interesting model. So there are lessons that we have learnt from there that can be applied in other parts of the world."
One area in which Matthews expects the UK to follow Australia, is the success of the wrap platform. While wrap platforms are yet to have a big impact on the market in the UK, Matthews believes that could soon change. He says: "Wrap platforms dominate the world Down Under now, 80% to 90% of all retail funds are placed that way. From Standard Life's point of view, I sent four people out to Australia to talk to my contacts and friends. They came back all excited. We have moved along the path and, as a major institution, we have made a good investment to develop our platform businesses. It's pretty impressive stuff, it is really very exciting."
Matthews says it is impossible to say how quickly its efforts will pay off. He believes regulations need to be modified, to facilitate the growth of the wrap platform, and has been in discussions with the regulator to simplify documentation for the client.
He adds: "As a company we are not betting the ranch on (wrap platforms), we will continue to do a lot of other things. But this is a really interesting area that merits our attention and we hope to move the market in that direction. It is very much about leading and shaping the market, it's about getting out there and telling the story, pointing out what is good and why, and, importantly, how we have to change the rules of the game so that it facilitates these platforms."
Matthews believes a number of suppliers will enter the market, but eventually consolidation will occur. He believes Standard Life has an opportunity to become a dominant player. He says: "We have got a very good chance, we are very well placed with the success we have in the self invested personal pension (Sipp) area, which has firmed up our reputation, the connection we have got with financial planners, our service reputation, which is very important, and then the technology itself.
"I think it is a fundamentally better way of doing business and it should provide us with the opportunity to start to build trust with the various stakeholders because of the more natural alignment of the customers' interests with the advisers and the providers."
Trust is an area Matthews believes the industry needs to work on. He says: "In the UK, in particular, the industry has lost the trust of a number of important stakeholders, not the least of which is the public. There are a whole lot of reasons for that but, in my opinion, it is worse here than in a lot of other countries.
"That is the big one for us; how do we change the way we operate, and are perceived to operate, so that over a period of time we can get back to where I think we deserve to be."
Matthews claims the positives for the industry are strong, with an ageing population becoming more concerned about issues such as funding their retirement and healthcare needs in the future.
He says: "It's been pointed out that the first of the baby-boomers started to retire last year, aged 60. What I am finding as I talk to other baby-boomers is they are not just interested in retirement, they are starting to panic about it. A lot of them have left it too late.
"There are important decisions people have to make about relatively large amounts of money and there is a lot of opportunity there for organisations like us and, in particular, for organisations that provide the advice. My view is these baby-boomers are going to be quite happy to pay to get professional advice to help them understand what the best action is.
"These are serious issues and people need help, they need experts, and financial services are in a good position. I think we are on the threshold of a new golden age for financial services." n
FCA consultation response
MoneyLens to be edited by former Mail on Sunday journalist Vicki Owen