26 Feb 2019
Standard Life today announced a price decrease for its Elevate platform for all new clients from 1st April 2019. This is a great move by Standard Life. It demonstrates a commitment to its core financial planning market and willingness to share economies of scale with advisers and end-consumers.
When Standard Life acquired the Elevate platform from AXA, it believed there were substantial back-office synergies and economies of scale to be made. Those synergies have been implemented and the platform is now sustainable and profitable, allowing it to secure an AKG ‘A’ Financial Strength Rating, an Adviser Asset Platinum Rating, as well as Defaqto 5 Star and Gold service ratings.
Elevate is passing on the benefits of its economies of scale with a price reduction for all new customers from 1st April. Existing clients will automatically benefit from the best available terms by the end of the year. The new rate card is as follows:
|Portfolio size||New fee||Old fee|
|Up to £150k||30bps||36bps|
|£150k to £750k||25bps||36bps|
|£750k to 1m||25bps||33bps|
|£1m to £1.5m||20bps||30bps|
|£1.5m to £2.5m||20bps||25bps|
|£2.5m to £5m||15bps||25bps|
The platform has retained the same across-the-board pricing structure, but has simplified the number of tiers and shaved several bases points off. On average customers will benefit from a 25% reduction in charges. At the modest end prices start at 30bps instead of 36bps, but tiering kicks in much sooner, with clients with assets of £150k+ benefiting from an average 10bps reduction.
The Elevate proposition is seen as the group’s core financial planning proposition and the price reduction is a demonstration of its commitment to the adviser market. This new pricing structure allows it to compete more effectively and comfortably against the likes of Cofunds, Aviva and Ascentric.
The development roadmap put in place by Standard Life helped it to retain advisers and attract new advisers fed up with re-platforming problems at Aviva and Cofunds. We estimate that the platform currently has assets of £13-14bn (Standard Life does not split the assets between the two propositions, but should). All Standard Life needs to do now is to simplify the fiendishly complicated pricing structure on the Standard Life Wrap…