Aberdeen Standard sees outflows persist but platform and pensions keep things positive

Standard Life Aberdeen’s investment arm has seen outflows continue, according to the first trading update for the Edinburgh investment giant since it was created as a result of August’s £12 billion merger of Standard Life and Aberdeen Asset Management.

The company said the outflows were in line with expectations given the asset classes affected and stressed that the latest results also show firm has benefited from an uplift from its pensions and platforms businesses.

For the nine months to September, Aberdeen Standard Investments’ assets under management dropped from £580.6bn to £569.7bn, with company noting that market conditions “remain challenging.”

This was offset by an extra £10bn in AUA for Standard Life Pensions and Savings, however, which reached £182.3bn.

Net inflows into Standard Life Pensions and Savings “growth channels” also increased by £1.8bn, while net inflows of more than £5bn took combined assets across the Wrap and Elevate platforms past £50bn.

While significantly smaller at £4bn, Aberdeen-owned Parmenion’s flows also amounted to £1bn.

Co-chief execitives Martin Gilbert and Keith Skeoch said: “While the combined business has experienced net outflows, these were in line with our expectations given the asset classes affected and the structural outflows from our lower margin mature books. Nevertheless the momentum in our business is good…We continue to innovate, launching new funds with strong backing from clients and winning new mandates across a wide range of investment strategies.”

Mr Skeoch also addressed speculation that has existed since the merger suggesting the company is seeking to offload its £15 billion annuity book.

The company said a sale is not imminent and Mr Skeoch stressed that the annuity book remains a “cash flow positive” and profitable part of the business, adding that although annuities is not seen as part of the company’s long-term future, there is no pressure to sell the book.

Mr Gilbert said: “Clearly you can see how important the pensions and savings business is to us – it’s where we get all our growth.”

The pair also touched on the subject of Brexit, maintaining they do not see it as a major issue for the firm.

Mr Skeoch said that larger asset managers have traditionally sold funds into Europe from offices in Luxembourg, as well as UK funds in the UK.

He said: “Touch wood, unless there’s something unforeseen, we remain reasonably confident that we are unaffected to any larger scale by Brexit.”