Absurd betrayal of brand
AGOOD name is rather to be chosen than great riches, proclaims Proverbs. Since the 2017 merger of Martin Gilbert’s Aberdeen Asset Management and the dowager of Scottish insurance, Standard Life, the two firms have contrived to damage both titles.
The idea that the group’s new identity Abrdn will have financial advisers up and down the land celebrating ‘a brand that cuts through’ is risible.
It is more likely to have advisers pulling their hair out as they try to explain what it represents to clients deciding how to deploy hard-earned savings.
The original post-merger structure of Standard Life Aberdeen (SLA) was always going to be tetchy with Gilbert, a largerthan-life networker, unlikely to operate smoothly with the technocratic Keith Skeoch. The divorce took a little time, with the entrepreneurial, golf fanatic Gilbert landing in the new world of fintech at Revolut.
The choice for Skeoch is more prosaic, with a job as chairman of the Financial Reporting Council awaiting legislative translation into the Audit, Reporting and Governance Authority or Arga. What they left behind is not pretty. The share price has tanked 31pc since the merger in spite of booming stock markets. The dividend was axed by one third in March amid heavy outflows of funds. In a deal of fiendish complexity in February this year, the Standard Life brand, with a heritage dating back to 1825, was transferred to the home for closed insurance companies, Phoenix. It extended to SLA the job of managing £147.4bn of Phoenix-held assets until 2031. Given the dismal performance of SLA, the mandate might not be regarded as in the very best interest of Phoenix customers.
Re-brands can stick. In the world of insurance, at Aviva, no one thinks very much these days of Norwich Union or Commercial Union, the two main constituent companies.
But there is also a long history of rebranding going wrong. Consumer goods giant Reckitt Benckiser changed to RB before deciding recently to revert to plain Reckitt.
When it comes to handling savings, financial advisers want names they can trust. It is no accident that Phoenix has chosen to use the Standard Life brand as its reintroduction to soliciting new business.
Aberdeen has made mistakes in the past, but is regarded as a pioneer in emerging market investment, which at some point will likely roar back. Schroders has not found it necessary to abandon its Hanseatic League origins for the unpronounceable. Among the biggest beasts, Fidelity, Vanguard and Blackrock are not, as far as one knows, reaching for the Wolff Olins magic.
The road back at SLA is not a new image but a big step up in performance.
Crime watch
DEFERRED Prosecution Agreements (DPAs), aping the American tendency to make deals with corporate miscreants, were seen as an efficient way of dealing with corporate fraud and bribery when introduced in the UK in 2014.
Among those to reach agreement with the Serious Fraud Office, in judge-approved deals, have been Rolls-Royce, Tesco and outsourcer Serco. The process has delivered more reliable justice, big fines and allowed firms to put the past behind them. No individuals were charged at Rolls-Royce, and the Tesco defendants walked free.
DPAs have had an unforeseen impact. It has made it much more difficult for the Serious Fraud Office to bring successful prosecutions against the individuals. In the latest prosecution to fall apart, two former bosses of Serco, Nicholas Woods and Simon Marshall were cleared of hiding £12m in profits from the firm’s electronic tagging contracts with the Government. In 2019 Serco was fined £19m as part of a DPA.
This case and others have shown it is all but impossible to bring successful prosecutions against individuals after a DPA. Although the stain of long criminal investigations can never be fully expunged from executive lives. The balance of fraud risk has been shifted to companies for white collar offences. That cannot be satisfactory.
Pill pushers
CONSUMER goods firms have a new battleground. Hard on the heels of Unilever buying US-based Smartypants vitamins in November 2020, Nestle, maker of Kit Kat, has gone one better by popping America’s Bountiful Company, producer of Nature’s Bounty vitamin pills, which was planning a £4.4bn float. Healthy living is the postpandemic rage.