A symbolic move by one of the biggest forces in Scotland’s key financial services sector last week may herald big changes that could impact on many people in the country.

Standard Life Aberdeen (SLA) announced last Wednesday that it was selling the brand with which the group and forebears have been associated for almost 200 years.

The Standard Life name must be one of the best known in the UK pensions world but Edinburgh-based Standard Life Aberdeen has apparently decided it has no need for it.

It has passed the name on to Phoenix as part of a complex deal. This will result in SLA actually paying £115 million to Phoenix, which has headquarters in London.

READ MORE: Standard Life Aberdeen wins backing for transformational £3.2bn sale of pensions arm

The deal was announced months after former Citigroup executive Stephen Bird took charge at Standard Life Aberdeen. It was billed as a move to simplify the arrangements put in place after SLA sold its pensions business to Phoenix for £3.2 billion in 2018.

This was heralded as transformational by SLA, which was created through the merger of Standard Life and Aberdeen Asset Management in 2017.

SLA bosses decided the best prospects lay in the racy global asset management business rather than in the boring old pensions business that Standard Life has been in for most of its life. The business was founded in 1825 and remained a mutual under the ownership of its members until 2006. The firm developed expertise in asset management as part of efforts to help build up pensioners’ funds.

The decision to sell the Standard Life brand indicates that Mr Bird is sure the focus on investment management is right, although SLA will retain a 14 per cent stake in Phoenix.

Mr Bird said SLA will unveil an exciting new branding later this year.

Some sector-watchers will feel that the rebranding provides an opportunity to remove a source of unhelpful confusion about the group.

READ MORE: Standard Life boss hails quality of Scottish workforce aherad of £11bn merger with Aberdeen Asset Management

While the executives who negotiated the merger between Standard Life and Aberdeen Asset Management decided the group should be called Standard Life Aberdeen, they called the fund management business they put at the heart of the strategy Aberdeen Standard Investments (ASI).

The messy compromise in terms of names suggested merger negotiations had involved difficulties, which may have had something to do with egos.

The impression was reinforced by the fact that Standard Life boss Keith Skeoch and Aberdeen Asset Management chieftain Martin Gilbert became joint chief executives of the enlarged business.

City analysts hated the arrangement, which did not last long.

Mr Gilbert stepped down as joint chief executive in March 2019, two months after former HSBC chairman Sir Douglas Flint took over the chairmanship of the SLA board.

Mr Gilbert departed SLA last year after a spell as vice-chairman.

READ MORE: Scots asset management heavyweight joins board of London funds business 

A University of Glasgow-educated chartered accountant, Sir Douglas is famed for his forensic mind.

It was significant that the board he led chose Mr Bird, an outsider, to be the new chief executive, rather than someone steeped in the traditions of Scotland’s financial services industry.

When his appointment was announced in June, Mr Bird described Standard Life Aberdeen as a company with “a great history, a strong brand, and an exciting future”.

Last week, however, he said directors were excited about the work that was being done on a new brand and looked forward to sharing the results later this year.

Mr Bird added: “The ‘Standard Life’ brand has an important heritage. In the UK, it has strong recognition as a life insurance and workplace pensions brand. This is closely aligned with Phoenix’s strategy and customer base. This is much less the case with the business we are building at Standard Life Aberdeen which is focused on global asset management.”

The name change exercise will likely create valuable work for brand gurus and digital visionaries.

READ MORE: Now is the time for Scotland to justify its lofty reputation on global investment stage

But sceptics will need some convincing that a name change alone will make much difference.

In February last year Merian Global Investors agreed to be taken over by Jupiter.

Merian was only bought out of Old Mutual Wealth in 2018. It is thought the buyout team had hoped to grow the business significantly before floating it on the stock market.

However, the value of the business reportedly fell from around £580m at the time of the MBO to £240m when the deal with Jupiter completed. Merian suffered £4.3bn outflows of funds in the first half of last year, leaving it with £16.7bn at June 30. Jupiter had around £56bn under management at September 30.

Merian-branded funds took on the Jupiter name last month.

Mr Bird took charge at SLA following a period in which the group experienced big funds outflows.

READ MORE: Market turbulence hits profits at Scottish investment giant

The group suffered net outflows of around £90bn in the three years from 2017 to 2019.

In August, Mr Skeoch said redemptions had slowed significantly and SLA had achieved a “resilient” investment performance amid what he described as one of the most volatile periods in his 40 years in the business.

But funds under management fell to £511.8bn at June 30, from £544.6bn at the end of 2019.

The fall in the first half of last year reflected the impact of the decision of the owner of Scottish Widows, Lloyds Banking Group to move £70bn funds that had been managed by Aberdeen Asset Management before it merged with Standard Life. Lloyds is working with Schroders, a big rival of Standard Life Aberdeen’s.

If the flows situation doesn’t improve quickly enough, things could get tricky at SLA. Job losses would probably be inevitable if the company looked to make cost savings to offset the resulting hit to income.

It employs around 4,000 people in Edinburgh currently.

READ MORE: Wealth manager eyes acquisitions in Scotland

SLA could use acquisitions to help it grow funds under management. If it really wants to compete in the global asset management business the company may still need to get much bigger. It is relatively small compared to the likes of Blackrock and Vanguard, which both have trillions of dollars under management.

Mr Bird has spent much of his career in Asia and may focus attention on that area.

The company could still be alert to acquisition opportunities closer to home, although Standard Life and Aberdeen Asset Management hoovered up lots of fund managers in Scotland between them. Edinburgh-based Baillie Gifford would be a tempting target in the unlikely event that partners in the blue-blooded firm decided to sell up.

Whatever name it uses, SLA will need to do a good job of managing the £147bn funds it is looking after for Phoenix. The group won a vote of confidence last week from Phoenix, which extended the term of the relevant fund management agreement by two and a half years, to 2031.

It remains to be seen if Phoenix made the right call in deciding to invest so heavily in the UK pensions market.

It is using Standard Life as a platform on which it expects to grow in that market. Given demographic trends, it seems reasonable to expect the size of the market to increase in coming years.

Phoenix appears to value the skills offered by staff in Scotland, where it has become a major employer.

The company employs 2,800 in Edinburgh.

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However, some sector-watchers in Scotland will be wary about such an important operation being controlled by a business that is based outside the country and which is listed on the stock market. There will be fears that activity could be moved to other places or jobs cut by Phoenix, in order to help it achieve the kind of earnings expected by investors and analysts.

Phoenix, which also administers closed pension books, has a big operation in Birmingham.

Advances in digital technology and artificial intelligence could mean the work of growing numbers of pensions industry workers being automated.