Standard Life Plc · LSE:SDLF
Standard Life — Investor Day (May 2016)
148 slides from Standard Life's investor day presentation, May 23, 2016
Slide 1: 2016 Capital Markets Day
2016 Capital Markets Day Building a simplified and well diversified investment company
Slide 2: Building a simplified and well diversified investment company
Building a simplified and well diversified investment company Keith Skeoch, Chief Executive
Slide 3: Forward-looking statements
This presentation may contain certain “forward-looking statements” with respect to certain of Standard Life's plans and its current goals and expectations relating to its future financial condition, performance, results, strategy and objectives. Statements containing the words “believes”, “intends”,
Slide 4: 2016 Capital Markets Day - Agenda
2016 Capital Markets Day - Agenda Standard Life | Capital Markets Day | 23 May 2016
Slide 5: Capitalising on major global trends shaping the savings and investments landscape
Capitalising on major global trends shaping the savings and investments landscape • We have a range of proven investment solutions to meet the needs of clients in a shifting investment landscape • Track record of consistently strong long-term investment performance • Expanding global reach of Standa
Slide 6: We have made a good start to the year in difficult market conditions
We have made a good start to the year in difficult market conditions Q1 2016 Q1 2015 £bn £bn Assets Group AUA 314.0 307.41 Standard Life Investments third party AUM (excl. strategic partner life business) 132.7 130.51 Standard Life Investments total AUM 258.6 253.21 Flows Group gross inflows2 10.7 1
Slide 7: With continuing momentum in growth channels
With continuing momentum in growth channels +£5.7bn £314.0bn +£2.3bn +£1.5bn (£0.3bn) +£1.6bn (£0.5bn) +£0.1bn Workplace: £0.4bn £307.4bn Retail: £1.1bn (£1.3bn) (£0.2bn) Institutional: £1.5bn Wholesale: £0.1bn FY 2015 Growth channels Mature Associate Spread/risk Market/other Q1 2016 Institutional &
Slide 8: Delivering “new active” investment outcomes
Delivering “new active” investment outcomes Rod Paris, Chief Investment Officer, Standard Life Investments
Slide 9: Strategic priorities
Strategic priorities • Broaden and deepen alpha • Improve the scalability and efficiency of our operating platform • Attract, retain and develop talent • Diversify revenue and profit Investments at the heart of Standard Life Standard Life | Capital Markets Day | 23 May 2016
Slide 10: Delivering “new active” investment outcomes
Delivering “new active” investment outcomes • We have a well diversified investment business • The investment landscape is shifting • We have an investment philosophy and range of skills and capabilities to succeed in this new landscape • Evidenced by a range of new investment solutions delivered fo
Slide 11: We have a well diversified investment business
We have a well diversified investment business From our beginnings as largely a UK equity manager in 1999 … … to a UK credit and equity manager in 2006 ... … to a well diversified business with a global proposition Cash and other £2.0bn HDFC AMC Cash and other Real estate (3%) £1.7bn (1%) Private Eq
Slide 12: The global asset management industry is reshaping
The global asset management industry is reshaping New active solutions will drive Global AUM growth A new capabilities set is required to capitalise on this growth $4.0tn Trading strategies $0.3tn $3.1tn (8%) $3.0tn Real assets/ 2016-2020 Global net flows1 $1.0tn private markets Next-Generation $0.1
Slide 13: We have a broad offering that is relevant to our clients
We have a broad offering that is relevant to our clients Increasing demand for “new active” over traditional active strategies • Unconstrained rather than benchmark driven • Absolute rather than relative return focus • Private not just public/listed markets Outcomes not just products • Defined benef
Slide 14: Slow growth low return environment driving need for outcome orientated investing
Slow growth low return environment driving need for outcome orientated investing Clients seeking quantifiable outcomes Risk weighted Dynamic allocation Prospective view of returns and risk factors Broad mandates / solutions or best in class componentry Multiple success criteria Inflation Growth Inco
Slide 15: Need for a much broader “new active” opportunity set
Need for a much broader “new active” opportunity set Traditional opportunity set “New active” opportunity set • Public markets • Private markets • Core fixed income and equity • Non-core and specialities • Local focus • Global focus • Individual asset class products • Multi-asset strategies • Benchm
Slide 16: We have a truly active investment philosophy
We have a truly active investment philosophy … Truly active asset manager Five key questions • We believe in fundamental research • We have high conviction • We don’t invest for the short term Focus on Change: the philosophy behind our investment decisions • Helps analyse key factors driving market
Slide 17: A team culture that encourages knowledge sharing and collaboration
… and a team culture that encourages knowledge sharing and collaboration Long- established and organic Key to Teams at attracting Heart of our and • >400 investment professionals retaining investment process • Across 3 locations: talent • Edinburgh Team • London Common Culture • Boston investment No
Slide 18: Focus on understanding client needs and innovation of our offering (2009)
Through our focus on understanding client needs and the innovation of our offering … Smaller Cos Equities Multi-asset Fixed income Real estate Private Equity Uncon- strained Equity Core Listed Equity RE GARS Hybrid RE Core Real Estate High Yield Credit Inv RETURN Grade Credit Govt Bonds Cash £5.7bn
Slide 19: Broad global capabilities to meet “new active” needs (2016)
… we now have broad global capabilities to meet the “new active” needs of our clients Smaller Cos Equities Multi-asset MyFolio EDGEM GEM Equity Fixed income Real estate Private Equity Uncon- strained Infra Equity Equity GFS My Core Listed Folio Equity RE V My GARS EDGF Hybrid Folio Equity RE IV Inco
Slide 20: Track record of client co-development and commercialising innovation
With a track record of client co-development and commercialising innovation Track Track Track Years Years Years record record record since Client since Client since Client above above above launch seeding launch seeding launch seeding benchmark benchmark benchmark Global MyFolio 5 years Smaller
Slide 21: Strong consultant recognition
Strong consultant recognition 20 strategies with positive ratings (17 with 2 or more ratings) • Positive ratings from investment consultants across all broad asset classes with increasing focus on Real Multi- global strategies Estate asset 3 4 • Alignment of ratings with market demand: • Absolute re
Slide 22: Backed by consistently strong long-term investment performance
Backed by consistently strong long-term investment performance Third party AUM above benchmark1 100% 90% 1 year 88% 23% 80% 70% 60% 50% 3.0 3.1 4.0 3.7 3 years 95% 92% 2.6 2.6 2.5 1.9 2.1 0.6 40% 1.6 1.4 1.6 0.5 1.2 1.3 1.5 1.1 0.8 1.1 30% (0.1) (0.6) 20% (2.9) 10% 5 years 90% 89% 0% Q3 Q4 Q1 Q2 Q3
Slide 23: Continuing commitment to broadening and deepening sources of alpha
Continuing commitment to broadening and deepening our sources of alpha through innovation • We are committed to broadening and deepening our sources of alpha • We continue to acquire new skill sets • We have the breadth of componentry to meet client needs across investment cycles • We are a trusted
Slide 24: Building our private markets capability
Building our private markets capability A large and growing asset base A significant private markets manager Private Credit 9% Private Equity and Infrastructure AUM1 Real Estate 20% £26bn 71% Source: McKinsey Global Wealth & Asset Management Practice. Increasing mainstreaming of private markets Crea
Slide 25: New private markets opportunities
New private markets opportunities Income, preservation and diversification strategies Fixed Income Real Estate Private Placements Long Income RE Real Estate Debt Listed Real Estate Asset Backed Core Balanced RE Infrastructure Debt Value-add RE Private Markets Group Junior Debt Income, diversificatio
Slide 26: Case study: Liability aware solutions for pension schemes
Case study: Liability aware solutions for pension schemes Surplus / Deficit of UK DB pension schemes vs 20yr gilt yields 1 2 300 Surplus / Deficit (£bn) 20yr Gilt Yield (%) 6.0% 200 5.0% 100 4.0% 0 3.0% -100 2.0% -200 -300 1.0% -400 0.0% • Pension schemes have often had to trade off liability hedgin
Slide 27: Case study: Integrated Liability Plus Solutions
Case study: Liability aware solutions for pension schemes Integrated Liability Plus Solutions (ILPS) Standard Life Staff Pension Scheme • Combining in a suite of single pooled funds: 300% • Liability hedging tools 250% Cumulative change 200% • Multi-asset growth potential (return engine) 150% • Leve
Slide 28: Strongly positioned in a rapidly changing global asset management industry
Strongly positioned in a rapidly changing global asset management industry • Understand client needs and how these are evolving • A proven active “focus on change” investment philosophy • Committed to broadening and deepening our capabilities to stay relevant • A scalable investment platform that we
Slide 29: MyFolio – UK’s leading risk based fund range
MyFolio – UK’s leading risk based fund range Bambos Hambi, Head of Fund of Funds Management, Standard Life Investments
Slide 30: MyFolio: Conceived by Pensions and Savings and delivered by SLI
MyFolio: Conceived by Pensions and Savings and delivered by Standard Life Investments • Developed to address client need in Pensions and Savings business • RDR and increasing regulation driving need for centralised investment propositions • Simple solutions that meet the needs of financial advisers
Slide 31: MyFolio AUM growth
Fast and consistent record of growth MyFolio has reached £8.4bn AUM in just over 5 years Managed funds investing in SLI funds are most popular £9bn MyFolio Managed £8bn 52.6% MyFolio Market 26.3% £7bn MyFolio Multi-Manager MyFolio Multi-Manager Income £6bn MyFolio AUM £bn MyFolio Managed Income £5bn
Slide 32: Making risk based investing easy for customers, advisers and their clients
Making risk based investing easy for customers, advisers and their clients Strategic Asset • We choose the right mix of assets for a specific level of risk Allocation • Proven track record of delivering the efficient frontier Tactical Asset • We decide which asset classes to favour over the shorter
Slide 33: Extensive expertise at every stage in the process
Extensive expertise at every stage in the process MyFolio Bambos Hambi – Head of Fund of Funds Management Tactical Asset Fund Selection / Rebalancing and Strategic Asset Allocation Portfolio Review Allocation (Multi-Asset Investing team) Construction (Multi-Asset Investing Team) Moody’s Analytics Gl
Slide 34: Delivering strong risk-adjusted returns since inception
Delivering strong risk-adjusted returns since inception MyFolio has delivered for customers since inception1 9% V SLI managed range Total annualised return2 8% IV Market passive range III V 7% IV III II 6% II 5% I I 4% 0% 2% 4% 6% 8% 10% 12% Standard Deviation (annualised) With clear benefits of our
Slide 35: Common investment process applied to a family of risk-based solutions
Common investment process applied to a family of risk-based investment solutions exceeding £12bn MyFolio AUM £8.4bn + wider family of risk based solutions International Workplace 1825 Drawdown and White Labelling Central Investment Opportunities Pensions Proposition Retail Direct Opportunities Compo
Slide 36: Leader in outcome-based investing
Leader in outcome-based investing Guy Stern, Executive Director and Head of Multi-Asset & Macro Investing, Standard Life Investments
Slide 37: Leader in outcome based investing
Leader in outcome based investing • Growing need for outcome oriented investing • Limitations of traditional multi-asset approach • Our cutting edge portfolio risk management • Team with breadth of expertise and experience • Broad range of multi-asset investment solutions • Scalable business with si
Slide 38: Generating returns in a slow growth, low inflation environment
Generating investment returns in a slow growth, low inflation and compressed return environment GDP Growth RPI 25% • Correlation has reversed - Prior to 1995: -0.51 20% - Since: 0.35 15% 10% • High inflation kills off growth 5% 0% • Ultra-low inflation causes -5% stagnation Focus on active investmen
Slide 39: Limitations of conventional portfolio construction
Limitations of conventional portfolio construction Markets deliver chaos Conventional diversification is insufficient • Constrained by: Discrete yearly performance (%) by market 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 - Strategic benchmarks and broad asset class weights 50.46 22.87 37
Slide 40: Outcome based investing and multi-asset
Outcome based investing and multi-asset 1000 Global Fund Flows into Multi-Asset ($bn) 830 800 605 600 419 400 263 179 157 200 56 225 156 186 56 101 22 84 0 -136 -200 2008 2009 2010 2011 2012 2013 2014 2015 Annual Net Sales ($bn) Cumulative Flows Since Financial Crisis Large and fast growing global m
Slide 41: A leader in multi-asset investment solutions
A leader in multi-asset investment solutions Cash and £75bn other £21.7bn HDFC AMC (9%) £7.0bn (3%) Equities SLW £6.5bn £61.8bn (3%) (24%) £51.9bn Multi-asset total AUM1 £39.9bn Multi-asset £33.3bn £51.9bn 2015 (21%) SLI total AUM £22.9bn £253.2bn £13.9bn MyFolio £8.1bn (3%) Fixed Income Private £76
Slide 42: Common investment philosophy underpinned by portfolio risk management
With a common investment philosophy underpinned by cutting edge portfolio risk management Fundamental Asset class Valuation Quantitative Economic team views modelling modelling analysis and strategies Large and experienced team Strategic Investment Group • Review Conviction • 72 team members • Debat
Slide 43: Broad-based return potential with genuine diversity
Broad-based return potential with genuine diversity Correlation to Global Equity European equity High yield credit Japanese equity Mexican rates v EUR US equity banks v consumer staples Short US Duration Long INR v EUR Long GBP v CHF Long MXN v AUD HSCEI v FTSE variance US and Europe v UK duration L
Slide 44: GARS: Diverse strategies reduce the overall risk profile
GARS: Diverse strategies reduce the overall risk profile 14% 12% 10% Interest Rates Total stand-alone risk Diversification benefits 8.8% 8% 6% Credit RV Equity 4% Equity 2% Expected volatility 4.1% 0% Deploys sufficient risk to deliver the return objective Source: Standard Life Investments UK GARS p
Slide 45: GFS: Diverse strategies reduce the overall risk profile
GFS: Diverse strategies reduce the overall risk profile 20% 18% Interest Rates 16% Total stand-alone risk 14% 12% Credit Diversification benefits 12 .7% Real Estate 10% RV Equity 8% 6% Equity 4% Expected volatility 6.1% 2% 0% Extended and deepened risk-taking for demanding objectives Source: Standar
Slide 46: Delivering proven volatility dampening
Delivering proven volatility dampening % Move -28 -26 -24 -22 -20 -18 -16 -14 -12 -10 -8 -6 -4 -2 0 2 4 6 8 10 12 14 16 18 Black Monday 1987 Gulf War 1990 Rate Rise 1994 Mexican Crisis 1995 Asian Crisis 1997 Russian/LTCM Tech Wreck (April 07 - 14, 2000) Sept 11th Equity Sell-Off (August 23 - October
Slide 47: Proprietary forward risk scenario analysis
Proprietary forward risk scenario analysis • Extreme, unlikely but economically plausible over a 1 year time horizon • Our subject matter experts translate scenarios into financial market impacts • Quantitative techniques – used to estimate portfolio returns Example: China Crisis Some scenarios curr
Slide 48: GARS: Delivering returns with managed volatility
GARS: Delivering returns with managed volatility over the last 10 years Global Equities1 GARS net2 230 Volatility: GARS 5.3% 210 Global Equities 13.8% (annualised, gross using monthly data from 01/07/2006 to Price (indexed to 100 at inception) 190 30/04/2016) 170 Maximum Drawdown: GARS -13.9% 150 Gl
Slide 49: GARS: Q1 2016 – a quarter of two halves
GARS: Q1 2016 – a quarter of two halves 102 Q1 H1 Q1 H2 -3% -2% -1% 0% 1% 2% 100 GARS Long equities Indexed performance (gross of fees) 98 Relative value equities 96 Credit 94 Global equity1 Interest rates 92 Currencies 90 Volatility 88 Stock selection 86 Cash 31-Dec 14-Jan 28-Jan 11-Feb 25-Feb 10-M
Slide 50: Applied to a range of capabilities that meet specific client needs
Applied to a range of capabilities that meet specific client needs Return Target / Risk Minimisation Risk Budget / Return Maximisation Absolute Return Global Absolute Global Focused Enhanced Absolute Return Global Tactical Global Bond Return Strategies Diversification Government Bond Asset Allocatio
Slide 51: Case study: Enhanced Diversification Growth Fund
Case study: Enhanced Diversification Growth Fund Clients frequently combine absolute return solutions with risk assets • To act as a volatility dampener • To retain performance link to growth asset markets 10 years of innovation and expertise in multi-asset allowed us to create EDGF • Aiming to deli
Slide 52: Case study: Enhanced Diversification Growth Fund performance
Case study: Enhanced Diversification Growth Fund EDGF (Net)1 EDGF(Net)* Universe2 DGFUniverse** DGF 124 122 120 118 116 114 112 110 108 106 104 102 100 98 96 A growing record of strong investment performance 1. EDGF shown net of fees (0.65%). 2. The DGF universe is composed of the 10 largest DGF fun
Slide 53: Scalability is in our DNA
Scalability is in our DNA Macro not • Paint with a broad brush micro • Restricted activity to large-scale macro components since inception Multi not • Wider opportunities to find strategies we like mono-asset • Drawing upon the wide expertise of Standard Life Investments 3 year not • Apply a longer
Slide 54: Leading trade implementation capability
Leading trade implementation capability TEAM RESPONSIBILITY Centralised dealing • Cash, equity and credit Multi-Asset Investing • Equity futures and options team of 22 Team of 72 CRIMS pre-trade compliance • Bond futures • Swaps MAI Implementation Cashflows Team of 7 Currency dealing • FX spot and f
Slide 55: Leader in the large and growing global outcome based investing market
Leader in the large and growing global outcome based investing market • Cutting edge portfolio risk management and ongoing innovation • Experienced team with breadth and depth of expertise • Broad range of multi-asset investment solutions to meet a wide range of client needs • Innovating and looking
Slide 56: Building a simplified and well diversified investment company
Building a simplified and well diversified investment company Keith Skeoch, Chief Executive
Slide 57: One company, one culture, one vision
One company, one culture, one vision Simplified and well diversified investment company Growth channels Stable Institutional Wholesale Workplace Retail mature books India and China One team – increased co-operation, collaboration and efficiency associate and JV Clients and customers Standard Life |
Slide 58: Delivering global growth and diversification
Delivering global growth and diversification Colin Clark, Executive Director and Head of Global Client Group, Standard Life Investments
Slide 59: Delivering global growth and diversification
Delivering global growth and diversification • Modern suite of capabilities and solutions to meet client needs • Serving a more diverse range of clients • Expanding the global reach of our distribution • Positioned for continued profitable global growth Standard Life | Capital Markets Day | 23 May 2
Slide 60: One company, one culture, one vision
One company, one culture, one vision Simplified and well diversified investment company Growth channels Stable Institutional Wholesale Workplace Retail mature books India and China One team – increased co-operation, collaboration and efficiency associate and JV Clients and customers Standard Life |
Slide 61: A broad and rapidly growing investment business
A broad and rapidly growing investment business Institutional1 Strategic Wholesale Standard Life (inc Ignis) Partner Life Wealth Business £78.1bn AUM1 £122.7bn AUM £45.9bn AUM £6.5bn AUM 2,500 clients 2 clients 7,300 clients 7,000 clients Total AUM: £253.2bn Total 3rd Party AUM: £170.1bn Total Clien
Slide 62: Long-established track record of profitable growth
With a long-established track record of profitable growth Standard Life Investments third party AUM1 and EBITDA margin 200 50% 180 £170bn £161bn 160 37% 40% Third party AUM £bn 36% 34% 42% 33% EBITDA margin 140 32% 30% 30% 38% 120 28% 30% 100 23% £90bn 80 17% £73bn 20% 14% £60bn £60bn 60 £56bn 11% £
Slide 63: Institutional – meeting the needs of clients globally
Institutional – meeting the needs of clients globally Sustained Growth of Global Institutional Book1 • Largest active manager of UK pension fund assets for 5th £70bn £67.0bn 67 consecutive year2 • Around 2,500 clients across 46 countries £61.4bn Institutional AUM 61.4 • Particular opportunities in m
Slide 64: Wholesale – positioned to benefit from democratisation of risk
Wholesale – positioned to benefit from the growing democratisation of risk Rapidly Growing Global Wholesale Book • Top 3 UK manager by AUM up from 17th place 5 years ago and £50bn market share doubled to 5.4%1 £45.9bn 45.9 • 2nd highest net and gross sales in the UK in 2015 and only manager to be in
Slide 65: Global coverage with team strength and depth
Global coverage with team strength and depth Edinburgh HQ Dublin London Montreal Paris Frankfurt Toronto Mumbai Boston Regional Hubs Hong Kong Offices 2010 Sydney Standard Life | Capital Markets Day | 23 May 2016
Slide 66: Global coverage: presence in 11 new locations since 2010
Global coverage with team strength and depth Edinburgh HQ Brussels Dublin Amsterdam Seoul London Stockholm Beijing Tokyo Paris Frankfurt Toronto Mumbai Boston Los Angeles Madrid Zurich Milan New York Regional Hubs Hong Kong Offices 2016 Sydney Presence in 11 new locations since 2010 Global Coverage:
Slide 67: An expanding global footprint
An expanding global footprint Asia2 £10.3bn 9% North America £11.7bn 10% 100% 33% Wholesale net inflows 49% 2015 Institutional1 and Europe £14.2bn Institutional1 84% 13% and Wholesale AUM £112.9bn 67% UK 51% £76.7bn 68% 16% 0% 2010 2013 2015 Rest of the world UK Two thirds of net inflows from outsid
Slide 68: Increasingly diversified by client type
Increasingly diversified by client type Wholesale Institutional Financial Wealth Fund Private Fund of Charities / Public Sovereign Strategic Family Office Corporates Insurers Advisers Managers Platforms Banks/GFIs Funds Foundations Authorities Wealth Partners UK & UK Ireland Ireland Austria Belgium
Slide 69: Increasingly diversified by client type
Increasingly diversified by client type Wholesale Institutional Financial Wealth Fund Private Fund of Charities / Public Sovereign Strategic Family Office Corporates Insurers Advisers Managers Platforms Banks/GFIs Funds Foundations Authorities Wealth Partners UK & UK Ireland Ireland Austria Belgium
Slide 70: Increasingly diversified by client type
Increasingly diversified by client type Wholesale Institutional Financial Wealth Fund Private Fund of Charities / Public Sovereign Strategic Family Office Corporates Insurers Advisers Managers Platforms Banks/GFIs Funds Foundations Authorities Wealth Partners UK & UK Ireland Ireland Austria Belgium
Slide 71: We have a well diversified investment business
We have a well diversified investment business From our beginnings as largely a UK equity manager in 1999 … … to a UK credit and equity manager in 2006 … … to a well diversified business with a global proposition Cash and other £2.0bn HDFC AMC Cash and other Real estate (3%) £1.7bn (1%) Private Equi
Slide 72: Growing client demand across all capabilities
Growing client demand across all capabilities Growth and Diversification of Information Requests +35% +163% +164% information requests +27% Number of +579% +232% Equities Fixed Multi-Asset Multi-Asset Real Estate Other Income GARS Other 2012 2015 • Significant increase in tenders and requests for in
Slide 73: Suite of client-led investment solutions with global appeal
Suite of client-led investment solutions with global appeal Smaller Cos EDGEM GEM Equities Multi-asset MyFolio Equity Private Equity Uncon- Fixed income Real estate strained Infra Equity Equity GFS My Core Listed Folio Equity RE V My GARS EDGF Hybrid Folio Equity RE IV Income Value ARGBF Add Core RE
Slide 74: Track record of client co-development and commercialising innovation
With a track record of client co-development and commercialising innovation Track Track Track Years record Years record Years record since above Client since above Client since above Client launch benchmark seeding AUM1 launch benchmark seeding AUM1 launch benchmark seeding AUM1 Global MyFolio 5 yea
Slide 75: Diversified by breadth of investment solutions provided
Diversified by breadth of investment solutions provided Absolute Return Income/ Yield Growth Multi-asset Risk Managed Growth Fixed Income Private Markets Uncorrelated Alpha Equities Multi Fund Liability Aware Preservation Decumulation Relating client needs to investment expertise Standard Life | Cap
Slide 76: Case study: Liability aware solutions for insurers
Case study: Liability aware solutions for insurers Large growth opportunity • Insurance companies around the world looking for expertise in “new active” • $750bn of global insurance assets estimated to be outsourced over the next 5 years1 Our leading capabilities • Combining multiple capabilities in
Slide 77: Distribution model aligned to client needs
Distribution model aligned to client needs Global Functions Global Markets Global Global Global Private Markets Product Client Relations Sales UK & Ireland Global Product Global Relationship New Business Equities Development & Management Development Management CEMEA Fund Solutions Client Strategy, P
Slide 78: Strong advocacy among our blue chip client base
Strong advocacy among our blue chip client base A Firm Which I Trust 100% 91% 58% • Premier blue chip, increasingly multi-national client base 50% • Client loyalty and growing advocacy Ability to Generate Superior Long Term Returns 100% 81% • Low attrition and top quartile redemption rates 69% • Sha
Slide 79: Growing our global brand awareness
Growing our global brand awareness Premium brand Aligned to values Raising global awareness Supporting diversification With an integrated global brand, marketing and distribution strategy to accelerate regional growth Standard Life | Capital Markets Day | 23 May 2016
Slide 80: Strategic partnerships have transformed regional growth
Strategic partnerships have transformed regional growth Year Equity Outsource Manufacturing Distribution Partner Market Relationship Ownership Partner Partner Partner Established Standard Life UK, Ireland, Germany 1998 - HDFC Asset Management India 1999 - Heng An Standard Life China 2003
Slide 81: Increasing breadth and depth of global coverage
With an increasing breadth and depth of global coverage across largest asset management markets Well established partner development programme with a pipeline of potential future opportunities Standard Life | Capital Markets Day | 23 May 2016
Slide 82: Targeting the largest and fastest growing asset management markets
Targeting the largest and fastest growing asset management markets around the world Industry Market Sizing Versus Estimated Growth1 Asia ex-Japan Latin America ($3.3trn) ($1.5trn) Forecast Growth UK Australia ($4.1trn) ($1.8trn) Japan Europe ex-UK ($4.2trn) ($3.5trn) Canada ($2.3trn) US ($38.7trn) M
Slide 83: Succeeding in the US – the world’s largest asset management market
Succeeding in the US – the world’s largest asset management market US AUM Growth: 2010 to 2015 £9.5bn £10bn • AUM up from £0.1bn in 2010 to £9.5bn in 2015 with £6.2bn positive net flows since 2010 £4.2bn • Over 200 high quality clients across 39 States £2.0bn • Diversified client base: sub-advisory;
Slide 84: Succeeding in the US – the world’s largest asset management market
Succeeding in the US – the world’s largest asset management market Standard Life | Capital Markets Day | 23 May 2016
Slide 85: Delivering global growth and diversification
Delivering global growth and diversification • Established track record of sustained profitable growth • Diversified by: • Geography • Channel and client type • Asset class • Range of solutions provided • Track record of commercialising innovation with growing demand across breadth of capabilities •
Slide 86: Leading the UK pension and savings market
Leading the UK pension and savings market Paul Matthews, Chief Executive, UK and Europe Pensions and Savings
Slide 87: One company, one culture, one vision
One company, one culture, one vision Simplified and well diversified investment company Growth channels Stable Institutional Wholesale Workplace Retail mature books India and China One team – increased co-operation, collaboration and efficiency associate and JV Clients and customers Standard Life |
Slide 88: Leading the UK pensions and savings market
Leading the UK pensions and savings market • We have a business with scale and momentum • Competitively positioned in growing markets • Exceeding the needs of gatekeepers to grow high value customer numbers and strengthen margins: • Advisers: powering successful adviser businesses • Employers: build
Slide 89: We have scale and momentum across our growth channels
We have scale and momentum across our growth channels Fast growth from our Workplace and Retail growth channels Stable mature book of business £80bn £76bn £80bn £69bn £33bn £63bn £32bn £29bn £52bn £45bn £24bn AUA AUA £22bn £43bn £34bn £37bn £34bn £34bn £32bn £32bn £33bn £28bn £23bn £0bn £0bn 2011 20
Slide 90: We are well positioned in attractive growth markets
We are well positioned in attractive growth markets Retail advised platform market is expected to grow strongly Strong forecast growth in our target workplace market £1,000bn £1,000bn c£770bn3 workplace DC assets4 Projected growth in platform market UK advised c£575bn c£300bn c£250bn2 c£225bn c£150b
Slide 91: We have helped to shape our market by responding to changing needs
We have helped to shape our market by responding to the changing needs of gatekeepers and our customers Retail Pensions freedoms Non-commission Online retirement model adopted Discounted share journey 1825 expansion Launched Launched Introduction classes Launched 1825 Launched SIPP Wrap MyFolio of R
Slide 92: Leading the UK pensions and savings market
Leading the UK pensions and savings market Barry O’Dwyer, Managing Director Corporate, Retail and Wholesale, UK and Europe Pensions and Savings
Slide 93: We have scale and momentum across our growth channels
We have scale and momentum across our growth channels Ongoing growth from our Workplace and Retail channels Stable assets and revenues from our mature book of business £100bn £500m £100bn £500m Retail and Workplace AUA £76bn Retail and Workplace £63bn £69bn fee based revenue1 fee based revenue Matur
Slide 94: Retail revenue continues to grow and revenue margins are stabilising
Retail revenue continues to grow and revenue margins are stabilising Retail revenue margin1 stabilising • Rate of decline in revenue margins has slowed £500m 57bps 57bps • Wrap revenue amounted to almost half of Retail revenue and 49bps as a premium proposition attracts stable revenue margins fee ba
Slide 95: Workplace business benefiting from slower decline in revenue margins
Workplace business benefiting from slower decline in revenue margins Workplace revenue margins are stabilising 71bps £500m 69bps 65bps 56bps 53bps fee based revenue • Rate of decline in revenue margin has slowed Workplace • Recent reduction in revenue margins reflected increasing proportion of large
Slide 96: We provide a compelling proposition for customers
We provide a compelling proposition for customers … •Pensions •MyFolio ISAs •Active Plus Bonds •SL Active Ret £6.0bn •Products, Investment service, •Standard solutions Life Wealth guidance, advice DIY Financial Investment Planning Funds Standard Life | Capital Markets Day | 23 May 2016
Slide 97: And compelling propositions for gatekeepers
And compelling propositions for gatekeepers Employer Flexible Technology Benefits Client Comms Services Consultancy Adviser Technical Services Expertise Investment Wrap Hub That are unique in the UK pensions and savings market Standard Life | Capital Markets Day | 23 May 2016
Slide 98: Powering successful adviser businesses
Powering successful adviser businesses David Tiller, Head of Adviser and Wealth Manager Propositions, UK and Europe Pensions and Savings
Slide 99: Platform assets set to continue their strong growth
Platform assets set to continue their strong growth … The demand for financial advice has never been greater Advisers turning to platforms to drive scalability and efficiency • Democratisation of financial risk – individuals taking £1,000bn increasing responsibility for their financial futures c£770
Slide 100: Our Wrap platform has capitalised on this demand
Our Wrap platform has capitalised on this demand Strong and growing net sales … … with low churn and high persistency … … have driven fast growth in Wrap AUA £5bn 100% £30bn £4.4bn £26bn net to gross sales of the top 4 platforms by AUA1 £3.5bn 77% £21bn Wrap net flows £3.2bn Wrap AUA £17bn Ratio of
Slide 101: We now have a clear lead in the adviser platform market
We now have a clear lead in the adviser platform market Legacy Fund Financial Wealth Management Supermarkets Planning Wraps Wraps £12bn 5-30bps 25-40bps 35-60bps net advised platform flows1 £10bn £70k average £80k average £140k average case size case size case size 2015 and 2014 £8bn £7.9bn £6bn £5.
Slide 102: Supporting the UK’s most successful adviser businesses
Supporting the UK’s most successful adviser businesses • More responsive Wrap Investment powering • Richer client experience hub adviser businesses • Scalable and compliant • Leading discounts on a broad range of investments • Access to market-leading investment solutions including MyFolio Business
Slide 103: Supporting the UK’s most successful adviser businesses
Supporting the UK’s most successful adviser businesses • Centralised Investment Proposition Management • Scalable bulk management of client portfolios Wrap • Centrally generated regulatory reporting Investment powering hub adviser • Automated execution, rebalancing routines and permitted businesses
Slide 104: We benefit from our scale and commitment to innovation
We benefit from our scale and commitment to innovation Our unique Wrap investment hub increases adviser and client choice £2bn £1.9bn Investment hub AUA • Launched in June 2014 in response to adviser demand – attracted close to £2bn in assets in less than 2 years £1.0bn • Provides advisers with acce
Slide 105: Increasing adviser access to SLI investment solutions
Increasing adviser access to SLI investment solutions Our investment solutions support advisers and meet client needs Increasing revenue for SLI through Wrap • SLI share of customer assets increases from c5% across the UK wholesale market to c25% of Wrap assets • Asset retention increases from 4 yea
Slide 106: Leading the UK advised platform market
Leading the UK advised platform market • Significant and growing demand for advice • Platforms now essential infrastructure for modern adviser businesses • Wrap is the number one adviser platform • Acquisition of Elevate expands our reach • Enabling adviser businesses to scale up to meet demand Powe
Slide 107: Building employer advocacy
Building employer advocacy Eddy Reynolds, Proposition Director, UK and Europe Pensions and Savings
Slide 108: Workplace DC pensions market set to grow strongly
Workplace DC pensions market set to grow strongly Workplace DC pensions market will double over five years £1,000bn • Democratisation of financial risk – significant shift from workplace DC assets1 Projected growth in DB to DC with individuals increasingly responsible for their financial futures c£5
Slide 109: Our fast growing Workplace business is well positioned to benefit
Our fast growing Workplace business is well positioned to benefit from this growth Strong growth in workplace also benefits our retail channels … … and provides predictable underlying flows £45bn £5bn £4.3bn £4.0bn £4.1bn Workplace gross flows £6.0bn £4.4bn £3.2bn £32.0bn £33.0bn £0.8bn £3.0bn £0.8b
Slide 110: Quality employers now looking beyond core pension provision
After a period of significant regulatory change, quality employers are now looking beyond core pension provision Core requirements: • High quality scheme administration and support • Default investment solution that delivers the right employee outcomes Increasingly important requirements: • Member e
Slide 111: We meet the wider range of employer requirements
We meet the wider range of employer requirements • Lifelens – an award-winning flexible benefits platform • Provides ‘big data’ on employees, facilitating • Award-winning workplace pension provider individualised engagement Pensions Flexible • Robust, scalable online portal for employers to and savi
Slide 112: We exceed the core requirements of employers
We exceed the core requirements of employers … Best Group Pension Provider for three years running. 2016 judges’ comments: Pensions Flexible and savings benefits products “Excellent to deal with … a proposition that genuinely delivers for both the employer and the scheme member … Standard was, yet a
Slide 113: We exceed their new requirements too
… and we exceed their new requirements too ‘Big data’ for pensions Pensions Quality improvement and cost reduction for Flexible and savings benefits employers products SLI 29% increase in regular contributions Communication consultancy Employers investment solutions 50% attendance at seminars vs. Fi
Slide 114: We attract high quality schemes with high quality membership
We attract high quality schemes with a high quality scheme membership Pensions Flexible and savings benefits products ORACLE EY BT SLI Communication investment consultancy solutions Linklaters Financial Financial advice guidance Providing our retail business with high quality customers Standard Life
Slide 115: The same proposition works for small employers as well
The same proposition works for small employers as well High quality proposition for high quality employers ... … with attractive economics 10,000 £6,000 Employer scheme fees £4,714 Good to Go schemes Annual G2G example Employee charge £4,266 £3,514 scheme revenue £3,066 £3,393 4,951 £2,193 3,938 £2,
Slide 116: Building employer advocacy
Building employer advocacy • Workplace pensions is an attractive market with structural drivers of growth • We are a market-leader with an efficient operation • Our highly differentiated proposition for employers will drive asset growth and stabilise revenue margin • High quality schemes will delive
Slide 117: Engaging with customers to build lasting relationships
Engaging with customers to build lasting relationships Barry O’Dwyer, Managing Director Corporate, Retail and Wholesale, UK and Europe Pensions and Savings
Slide 118: Market dynamics are changing the nature of customer relationships
Market dynamics are changing the nature of customer relationships Workplace 3.4 million customers Retail Financial Employers Customers advisers Employers increasingly want us to RDR has created clarity as customers engage directly with employees no longer serviced by advisers Leavers from workplace
Slide 119: Customers have differing needs for guidance and advice
Customers have differing needs for guidance and advice Do it Customer and client for me Revenue margin Face to face advice wealth Digitally Do it delivered advice, with me robo-advice and sophisticated guidance DIY online functionality, Do it tools and guidance myself Tailoring our engagement to cus
Slide 120: Employer relationships help build life-long customer relationships
Our strong relationships with employers help us build life-long relationships with customers Most customers join Standard Life through their workplace • 870,000 joiners since auto enrolment began • Very low cost of customer acquisition £6.0bn • Over £6bn of assets transferred to Retail channel over
Slide 121: The power of employer advocacy with “Click to Switch”
The power of employer advocacy with “Click to Switch” Traditional digital marketing has limited success • Communication, even when tailored to specific customers, is often ignored • Industry average “action rate” is c2% £6.0bn Employer endorsement can make a big difference Case study: A world leadin
Slide 122: Enabling customers to make the most of their savings
Enabling customers to make the most of their savings Active Plus delivering better customer outcomes … … and at higher margins 75 bps • Most new clients opt for our risk based investment solutions including Active Plus Customer charge 50 bps • Many existing clients are upgrading to Active Plus 40 bp
Slide 123: Technology can bridge the gap between face to face advice and DIY
Technology can help to bridge the gap between face to face advice and DIY What is thought of as robo-advice is fairly limited • Usually risk-based funds and model portfolios • We have offered MyFolio risk-based funds and risk profiler for over 5 years £6.0bn Face- to-face advice Digitally delivered
Slide 124: Guiding our customers through their retirement journey
Guiding our customers through their retirement journey £6.0bn Our award winning retirement journey meeting the challenge of pension freedoms • Large pent-up demand on going live in April 2015 • We needed a scalable automated process for customers looking to access their pensions • Used “gamification
Slide 125: Creating an automated investment solution with SLI
Creating an automated investment solution with SLI making investment in retirement easy • Standard Life Active Retirement is our ready-made investment solution for flexible drawdown • Designed to help balance the need to withdraw money to live on with the need for it to last £6.0bn • Funds are autom
Slide 126: A great experience for our customers
A great experience for our customers £6.0bn “This was by far the easiest access to a pension/pension “We have several pensions pot and the process was so with different companies and simple to follow. Well done.” Standard Life is by far the best and easiest to use.” “I completed the whole exercise o
Slide 127: 1825 building a UK-wide advice business
1825 building a UK-wide advice business to meet the growing need for advice Controlled build out accelerated through acquisitions of leading adviser firms • 4 acquisitions since February 2015 Face- • Regional offices now in Scotland, North of England, London and East Anglia to-face advice • 70 finan
Slide 128: Leading the UK pensions and savings market
Leading the UK pensions and savings market • We have a business with scale and momentum • Competitively positioned in growing markets • Exceeding the needs of gatekeepers to grow high value customer numbers and strengthen margins: • Advisers: powering successful adviser businesses • Employers: build
Slide 129: Ongoing focus on improving efficiency
Ongoing focus on improving efficiency Luke Savage, Chief Financial Officer
Slide 130: We have a simple and consistent business model
We have a simple and consistent business model … Increasing assets Maximising revenue Driving profit Lowering unit costs Optimising the balance sheet, generating cash and growing the dividend • Highly scalable fee based business • Expanding our investment capabilities and global reach with cost disc
Slide 131: Delivered strong revenue and profit growth
… that has delivered strong revenue and profit growth … Group underlying income Group underlying performance £2,000m £1,000m £5.2bn £0.8bn £1,680m underlying performance £101m underlying income £483m £630m £1,114m £101m Group Group £148m £1,096m £529m £439m +108% +394% £255m £527m £148m £107m £0m £0
Slide 132: Leveraging the scalability of our fee business
… by leveraging the scalability of our fee business … Group underlying fee income Group underlying fee expenses £2,000m +63% £2,000m £0.8bn underlying fee expenses £1,579m underlying fee income +22% £966m £1,050m Group Group £859m £0m £0m 2010 2015 2010 2015 … while continuing to invest for growth A
Slide 133: SLI: Ongoing investment to support global growth
SLI: Ongoing investment to support global growth … Growing investments business while managing costs £200bn 100% (incl. Phoenix life business) £170bn Standard Life Investments £161bn • Broadening and deepening our investment capabilities cost/income ratio1 3rd party AUM 66% 62% 61% 61% • Globalising
Slide 134: SLI: Investment manufacturing and operations benefiting from efficiencies
SLI: Our investment manufacturing and our operations are already benefiting from efficiencies … Broadening investment capabilities and delivering efficiencies Operations benefiting from one global platform £200bn 20bps £200bn 20bps (incl. Phoenix life business) (incl. Phoenix life business) £170bn £
Slide 135: SLI: Expanding our global distribution capability
SLI: … while we continue expanding our global distribution capability … Investment in our global distribution is driving growth in flows £35bn 100bps £28bn Wholesale gross flows Global Client Group • Fast growing and increasingly international client base – Institutional and expense bps1 £20bn £21bn
Slide 136: SLI: A flexible operating model to support global growth
SLI: We have built a flexible operating model to support global growth ambitions Complex infrastructure at end of life Scalable global operating platform • Technology dated and inflexible – expensive to maintain • A single core global operating platform • Few benefits from scale • Simplified platfor
Slide 137: SLI: Maintaining flexibility in our cost base
SLI: Maintaining flexibility in our cost base … Compensation ratio reflects our improved efficiency £600m 50% £532m 45% £450m • Growth in total expenses includes acquisitions of Ignis Standard Life Investments Standard Life Investments 44% total operating expenses 42% 40% and private client division
Slide 138: Pensions and Savings: A track record of operational leverage
Pensions and Savings: A track record of operational leverage … Highly scalable Workplace and Retail business £150bn 100% Workplace and Retail AUA UK Pensions and Savings cost/income ratio1 74% £76bn • Benefiting from investment in technology 64% 60% 58% 58% £69bn • Scalable Workplace and Retail plat
Slide 139: Pensions and Savings: benefiting from a predominantly fixed cost base
Pensions and Savings: … benefiting from a predominantly fixed cost base We have a largely fixed cost base… …with growth in AUA driving reduction in unit costs £600m £150bn 60bps UK operating expense bps UK Pensions and Savings £480m 57bps £442m £456m £455m £99bn operating expenses £430m £105bn £110b
Slide 140: Opportunities to drive further efficiencies in Customer Operations
Pensions and Savings: Opportunities to drive further efficiencies in Customer Operations … Modernising 20 year old workflow and call routing systems UK Customer Operations FTEs • Reduces cost of maintaining out-of-support systems 2,000 • Creates capacity without increasing FTEs 1,750 Streamlining ex
Slide 141: Modernising our IT architecture to deliver further efficiencies
Pensions and Savings: Modernising our IT architecture to deliver further efficiencies … Our newer technology is flexible and highly scalable but our legacy The Digital Experience systems are inflexible and expensive to maintain • While we have one set of systems some date back to 1970s Data • Specia
Slide 142: Ongoing focus on improving efficiency
Ongoing focus on improving efficiency … • Highly scalable fee based business • Ongoing investment to support global growth in SLI • Flexibility in SLI’s cost base provides resilience in difficult market conditions • Largely fixed cost base in UK Pensions and Savings • Ongoing initiatives to remove a
Slide 143: Building a simplified and well diversified investment company
Building a simplified and well diversified investment company Keith Skeoch, Chief Executive
Slide 144: Our simple business model continues to serve us well
Our simple business model continues to serve us well Increasing assets Maximising revenue Driving profit Lowering unit costs Optimising the balance sheet, generating cash and growing the dividend Standard Life | Capital Markets Day | 23 May 2016
Slide 145: Profits driving underlying cash generation
Profits driving underlying cash generation £500m £447m Group underlying cash generation £419m £347m £304m £203m £162m £0m 2010 2011 2012 2013 2014 2015 All figures are reported on a continuing operations basis. Standard Life | Capital Markets Day | 23 May 2016
Slide 146: Progressive dividend policy
Progressive dividend policy 20p 18.36 17.03 +7.8% 15.80 +7.8% 14.70 Dividend per share +7.5% 13.80 13.00 +6.5% 12.24 +6.2% 11.50 11.77 +6.2% 10.80 +4.0% +6.5% +2.3% 5p 20061 2007 2008 2009 2010 2011 2012 2013 2014 2015 Growing our dividend 1. Implied final dividend based on 5.40p dividend for period
Slide 147: Building a simplified and well diversified investment company
Building a simplified and well diversified investment company • We have a range of proven investment solutions to meet the needs of clients in a shifting investment landscape • Track record of consistently strong long-term investment performance • Expanding global reach of Standard Life Investments
Slide 148: 2016 Capital Markets Day
2016 Capital Markets Day Building a simplified and well diversified investment company