Don’t be surprised if see you Keith Skeoch wearing a red cape at the next Standard Life results presentation. Having appointed him as chief executive, the group doesn’t seem to be in any great hurry to replace him as chief executive of Standard Life Investments, its most important business. Instead, it appears Mr Skeoch is going to attempt to be an executive Superman – though you probably won’t see his underwear on the outside of his trousers.
This is a dangerous path to travel given the firm is trying to reshape a life insurance and pensions business convulsed by change. Life insurers have traditionally had trouble building up fund managers, interfering in their operations and baulking at the salaries demanded by their staff. Clients ranging from big pension funds to small financial advisers have taken note and steered their business towards specialists.
Under its outgoing chief executive, David Nish, Standard has managed to break the mould, succeeding through leaving well alone and giving Mr Skeoch his head. Long-time observers of the group have found this rather remarkable. Standard remains, at heart, a conservative, and rather parsimonious, Edinburgh insurer, albeit one that has had to adapt to rapidly changing market conditions.
Its success in doing so is good news for the business because Standard’s money manager can ensure that its future is a rosy one. Government reforms to pensions, freeing people from the requirement to buy annuities when they retire and allowing those who already have one to bail out, have dealt a blow to one part of the group’s operations.
But Standard is a beneficiary from other reforms, such as auto-enrolment into workplace pensions. This has helped money managers like SLI, which has picked up a healthy supply of new mandates. It should also benefit from a growing demand for annuity alternatives.
With its chief executive now running the group as well, SLI would appear to be in a strong position. But even a businessman as talented as Mr Skeoch will struggle to devote quite the same amount of time and attention to it with so much else on his plate.
For the long term, SLI needs a strong and assertive chief executive of its own. It needs another Keith Skeoch. The future of the group, not to mention the investments of a lot of small shareholders, are riding on its getting one. Mr Skeoch should take note. His boardroom colleagues should bring it to his attention if he doesn’t.Reuse content