OBSERVERS of Standard Life Aberdeen would not have been surprised to hear Martin Gilbert and Keith Skeoch talk up the prospects for the newly-merged investment giant as they unveiled its maiden update to the City. This, after all, is a deal they have staked their reputations on.

Yet, for all the confident talk of delivering greater value for clients and shareholders, it seems clear that this has been a union forged against a challenging backdrop, notably in the asset management sector. As yesterday’s update confirmed, the trend of outflows we have seen in recent years from Aberdeen and Standard Life funds has continued, signalling that the challenges faced by active fund managers in taking on the cheaper passive funds remain.

But there are other factors at play. Laith Khalaf, senior analyst at stockbroker Hargreaves Lansdown, noted that some institutions could well be holding back from investing in Standard Life Aberdeen funds until the dust settles on the merger. Equally, there might be investors who have decided to move their investments because they were not convinced by the merits of the deal. But there continues to be logic to the £12 billion tie-up, Mr Khalaf said. For Aberdeen, there is the prospect of stability after sustained outflows, while for Standard Life it has brought instant scale in the asset management sector. Time will tell if it was the right call.