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Standard Life’s Jenny Davidson comments on Investment Hub milestone


Standard Life has recently announced that separately managed accounts (SMAs) on its Investment Hub have hit GBP10 billion of assets under management (AUM).

The Investment Hub supports users with discretionary permissions and now has more than 100 DFMs and over 650 adviser firms investing in the DFM portfolios. It is designed to enable firms who use Standard Life Wrap to efficiently separate their activities into distinct advice and investment functions.

“Clear segregation between financial planning and investment management is crucial to meeting the needs of financial advisers and discretionary managers,” says Jenny Davidson (pictured), Head of Platform Investment Proposition at Standard Life.
“Following RDR in 2012, platforms and adviser businesses had to adapt; as a result, we anticipated the growing demand for advisers looking for investment expertise. That is why in 2014, we launched the Investment Hub.
“Since then, advisers have seen the introduction of MiFID II, pension freedoms and further regulatory focus on advisers’ investment propositions, client segmentation and stricter controls over fee disclosure,” says Davidson.
Davidson explains that the role of the Hub is to recognise the different roles and responsibilities between financial planning and investment management, particularly in relation to these regulatory requirements as well as more complex client needs. “Ultimately, we are the conduit that helps them create the right outcome for the end clients.
“We believe that financial advice and investment are very different disciplines. However, the Hub can also be used by advisers that want to create their own investment outcome for the clients. We are acutely aware that there is a large percentage who want to retain some of that [investment expertise] in-house.”
As part of Standard Life Wrap, the company has also launched the Professional Portfolio Manager (PPM). Davidson explains that the PPM segregates the advice and investment functions: “If you are carrying out financial planning, the platform facilitates permissions and responsibility around that, and if you want investment management, then the hub will help you do that for your client.” Added to that it has also launched its Individually Managed Accounts (IMA) technology on the platform.

The PPM aims to enable businesses to scale their advisory investment processes to serve more clients with more investment solutions, but in a more efficient way.
Assets on the platform have been growing year on year. “Our functionality fits with compliance and helps advisers with their interactions with clients, so that’s why we’ve got to this monumental point in reaching GBP10 billion,” she adds. As at 30 June 2019, GBP59.8 billion of assets are invested across the Standard Life Wrap and Elevate platforms. The Hub is fully integrated into the Standard Life Wrap platform.
More specifically, Davidson believes there is a trend for outsourcing to discretionary investment management, “either because advisers want to focus on their core business which is financial planning or there is an investment expertise that they can’t fulfil.” This means the adviser makes recommendations to the client and the DFM carries out the activities and there is no interference from each party in terms of the investment mandate that has been set.
“We think the future will be about mass customisations for individuals. Essentially, it’s about automating the underlying but still providing an individual client outcome,” she adds.

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