Ian McConnell: Standard Life Aberdeen to Abrdn : What to make of astonishing name call?

It felt necessary, even with a near-certainty of exactly how far on in the month we were when the announcement was made on Monday morning, just to double-check it was not the first of April before filing an article on the name change to The Herald’s website. This urge, arising from the degree of surprise over the branding decision, was intensified by Edinburgh-based Standard Life Aberdeen’s declaration in its announcement that its new, (vowel-light) name would be “pronounced Aberdeen”.

However, while many people perhaps struggled to believe their eyes on Monday, the rebranding was very real. And the degree of thought which had gone into it was evident in recently installed chief executive Stephen Bird’s extensive comments on it. Observing the reaction to these comments, not everyone was impressed, with some viewing them as far too heavy on corporate speak.

Motherwell-born Mr Bird, who was appointed as chief executive of Standard Life Aberdeen last autumn after more than two decades at global banking giant Citi, declared: “Our new brand Abrdn builds on our heritage and is modern, dynamic and, most importantly, engaging for all of our client and customer channels. It is a highly differentiated brand that will create unity across the business, replacing five different brand names that have each been operating independently.”

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As well as its focus on asset management, Standard Life Aberdeen flagged as other key areas its savings and wealth operations and technology platforms for financial advisers in the UK and their customers.

Mr Bird declared: “Our new name reflects the clarity of focus that the leadership team are bringing to the business as we seek to deliver sustainable growth.”

There might be those who would note wryly that clarity of focus should be easy for an asset management firm. The one thing that really matters is investment performance. That is not to say that Mr Bird and his team are not focused on investment performance – rather it is to highlight the fact this will surely be far more important to the fortunes of the company than a brand.

Of course, particularly in this increasingly digital age, branding is important too.

And, once the initial surprise over the Standard Life Aberdeen name change subsided, the question arose of whether or not it might turn out to be an astute move. It remains difficult to form an opinion on this.

It is worth noting the Abrdn name was the end result of a collaboration between London brand consultancy Wolff Olins and Standard Life Aberdeen, with the financial institution obviously having the final say.

It was Wolff Olins which brought us the Diageo brand. And, at the time, the announcement of this brand by the business formed by the merger of drinks giants Guinness and Grand Metropolitan prompted bemusement and some laughter. The explanation back in 1997 went along the lines that the new name, formed from Latin and Greek, reflected how every day around the world people consumed the company’s products. Many asked back then why a group with a world-renowned brand name in Guinness needed a new creation. However, more than two decades on, the Diageo name seems to have worked out okay.

The Abrdn name, with its lack of vowels and pronunciation instructions, does seem to take things to a whole other level in terms of novelty, it has to be said.

It contrasts starkly with, for example, Scottish Mortgage Investment Trust, which has the most traditional of names. This venerable investment trust has for many years now been at the cutting edge in identifying and reaping rewards from new and emerging technologies and changing consumer trends globally, with longstanding holdings including electric vehicle pioneer Tesla, US giant Amazon, and Chinese online marketplace operator Alibaba. And the trust has enjoyed great success. It has undergone a minor name change in recent times, but only to its current moniker from Scottish Mortgage and Trust. Scottish Mortgage’s manager, the similarly venerable, Edinburgh-based Baillie Gifford, has seen no need to change its name in these days of rapid and dramatic change, and has enjoyed tremendous success in recent decades, based on its investment performance.

Some of the criticism of Standard Life Aberdeen’s rebranding has, understandably, been around heritage. Consumer fads and quirky brands come and go but history is important, for so many reasons.

It has been galling, from a Scottish perspective, to see the Royal Bank of Scotland name replaced at holding company level by NatWest, a change which took effect last year. The NatWest name dates back to 1968. Royal Bank of Scotland was founded in 1727.

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This change of name was implemented by chief executive Alison Rose. Ms Rose worked for NatWest when it was acquired by Royal Bank of Scotland back in 2000 after a hostile takeover battle, having joined the English bank as a graduate trainee in 1992. NatWest remains majority-owned by the UK Government, following the bail-out (to the tune of tens of billions of pounds) of the institution formerly known as Royal Bank of Scotland amid a global financial crisis which took a lurch for the worse in autumn 2008. It seems these days that what is now NatWest is essentially run from London, where Ms Rose is based. Technically, Edinburgh is still the head office, although Ms Rose reiterated yesterday that the HQ would move to London in the event of Scottish independence.

The Standard Life name dates back to 1825. However, for fund management house Standard Life Aberdeen, the name issue was not as straightforward as the choice presided over by Ms Rose. That said, it was not even clear that there needed to be a choice when it came to Royal Bank of Scotland. After all, it was much more than a decade since the global financial crisis and it was not apparent from an external perspective that the Royal Bank of Scotland name, which thankfully remains north of the Border, was causing the institution any issues.

The bank is obviously now a very different institution to what it was before the financial crisis. It has retrenched dramatically under state ownership – with the sell-off of major overseas and international businesses – and is now much more of a UK than a global bank.

Returning to Standard Life Aberdeen’s rebranding, it was not merely a matter of someone or a group of people deciding they fancied a change of company name. Rather, corporate transactions in the wake of the financial services group’s formation through the merger of Standard Life and Aberdeen Asset Management in 2017 also played a part.

Standard Life Aberdeen, which has intensified its focus on asset management in recent times, had announced in February that it was selling the brand with which the group and its forerunners had been associated for nearly two centuries. It revealed then that it had agreed to sell the Standard Life brand to the Phoenix group during this year, as part of a complex deal including other elements. Phoenix said in February this deal would result in Standard Life Aberdeen paying it £115 million cash.

Announcement of the brand sale in February came around three years after Phoenix Group’s deal to acquire the pensions business that operates under the Standard Life brand for £3.2 billion.

It is understood part of the reason for the Abrdn, as opposed to Aberdeen, name is around ownership of digital assets and that the brand deal with Phoenix meant Standard Life could not feature in the Scottish asset management group’s new moniker.

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So there were major practicalities to be considered.

One thing is plain though: back in the late-1990s, it would have been difficult to conceive of the transformation that has occurred at Standard Life. Back then, it was very much a traditional life and pensions office.

Sandy Crombie and his successor at the head of Standard Life Investments, Keith Skeoch, deserve great credit for creating a huge, global standalone fund management operation out of a life and pensions office setting. So successful were these efforts that this has now become the main business. We should not underestimate the monumental task they undertook in building such an operation from pretty much a standing start in terms of third-party money. They transformed a fund management operation which had previously been focused on looking after the institution’s life and pensions policy money into one which competed in a fiercely competitive global and domestic environment to win fund management mandates from major institutional clients and attract retail investors.

Difficulties encountered by Scottish Widows in attempting to build a similar operation, which started at around the same time as the drive at Standard Life, highlighted the extent of the challenges in undertaking such a task, amid the old, traditional life office cultures.

Standard Life’s decision to merge with Aberdeen Asset Management, built up by the redoubtable Martin Gilbert, was in many ways surprising given these seemed like quite different operations.

The period since the merger has not been a particularly easy one, as the company’s share-price graph shows. Big outflows of client money can be difficult to avoid amid the upheaval of fund management mergers and so it has proved.

Regardless of the rebranding, the asset management group’s focus must remain on investment performance. It will be that, more than anything else, which dictates its fortunes, and in this context it is crucial to emphasise that good investment performance is down, quite simply, to talented people.

Mr Bird and Sir Douglas Flint, the Glaswegian chairman of Standard Life Aberdeen who was previously finance director and then chairman of global banking giant HSBC, will no doubt be well aware of this. However, when it comes to fund management businesses, the simple truths are always worth reiterating.