Standard Life’s 1825 imposes portfolio cap on SLI holdings


It has emerged Standard Life’s financial planning arm 1825 operates a cap on the proportion of clients’ assets that can be held in funds managed by the wider group.

Vertically integrated firms, such as 1825, have come in for criticism over recent months for business models that appear to favour the recommendation of in-house investment solutions.

But Fund Strategy understands 1825 has a limit in place so that client portfolios can only hold up to 30 per cent of assets in Standard Life Investments funds.

It is unclear whether such a cap is imposed across other vertically integrated firms. It is understood some advice firms have been deterred from agreeing to acquisition deals on the basis that firms have discussed targets around fund flows to in-house offerings.

Old Mutual Wealth chief executive Paul Feeney has previously told Fund Strategy: “nobody has any target anywhere in Old Mutual Wealth to drive business to our investment solutions”.

Rival providers have hit out at the vertically integrated business model, while influential industry analyst Ned Cazalet says the desire to replicate St. James’s Place has created weak firms.