One of the big stories in retail financial services today is Standard Life getting a new logo, which I guess means it is a slow news day.
Of course the once proud mutual life assurance company are not simply unveiling a new logo. Instead, they are announcing “the repositioning of its brand and a refreshed visual identity”.
In plain English, this probably means they have paid a branding consultancy an obscene sum of money to design a new logo and come up with some nice-sounding words about corporate values.
At least it is shareholder rather than policyholder money being spent in this way since they demutualised back in 2006.
What the new brand (and the associated corporate speak) does reveal is a changing role for product providers in the world of retail financial services.
All life assurance companies and product providers have some tough decisions to make over the next year or so ahead of the implementation of the Retail Distribution Review (RDR) at the end of 2012.
The new regulatory environment means that product providers no longer call the shots when it comes to adviser remuneration.
Under the current rules, it is possible for product providers to influence their market share by setting different commission levels. Whilst many IFA firms already ignore these attempts to capture more new business, from 1st January 2013 it will be solely down to the IFA and their client to agree remuneration – something known as Adviser Charging.
This leaves product providers urgently needing to reinvent their purpose in the sector.
We have long held the opinion that the traditional product provider is an endangered species, with their share of the market being increasingly eroded by modern ‘wrap’ investment platforms. These win market share based on unrestricted access to investment funds and a transparent charging structure; the antithesis of products from a life assurance company.
Surviving in the world post-Retail Distribution Review will means product providers needing to decide on their purpose in life – are they manufacturers of financial products, administrators of investment solutions or even distributors of the above?
Some will undoubtedly try to fulfil the role of all three.
It will take much more than a new logo and brand image to change the strategic direction of a big life assurance company. This is one occasion where being small and nimble has its distinct advantages.
