Standard Life Investments says it has reached a “preliminary agreement” with Bank of New York to outsource mutual fund administration services to the bank. Standard Life has already outsourced operational activities to Citigroup.
“The mutual funds industry in the UK has been changing rapidly over recent years,” says William Littleboy, Operations Director, Standard Life Investments. “In particular, the advent of fund supermarkets and other platforms changes the way these products are sold and administered. Change is also being driven by regulations, legislation and the slow move towards harmonisation of retail investments across Europe. These changes have a major impact on the business of Standard Life Investments. After assessing the respective merits of a number of leading service providers, the Standard Life Investments Board has decided to enter into a ‘handshake agreement’ with The Bank of New York for the outsourcing of a range of mutual funds administration services. Our people deploy a high level of skill, expertise and professionalism in delivering award winning service to our clients. As a leading global supplier of transaction services, The Bank of New York has substantial scale, commitment and management depth. Going forward, we believe that Standard Life Investments and The Bank of New York will both benefit from deploying them together. Equally, those people will ultimately benefit from being inside a business built around their expertise and disciplines.”
Standard Life says there will now be a period of further evaluation and negotiation before a final decision is made. The Mutual Funds Operations group at Standard Life Investments service retail ISA and OEIC clients and also deal with specialist institutional investors, handling new business, repurchases and general servicing enquiries.
Should Standard Life Investments decide at the end of the evaluation period to proceed with the outsourcing, then those people deemed to be ‘in scope’ – approximately 65 – will be transferred to the Bank of New York in Edinburgh.
On the basis of discussions to date, the Standard Life Investments Board says it is convinced that this decision will ensure the company remains well placed to meet the needs of its developing business and its clients.
“This is an important transaction which further positions us as a leading provider of mutual fund administration in Europe,” says Tim Keaney, Executive Vice President and Head of Europe, The Bank of New York. “Our scale, commitment to the business, and management depth will ensure that we deliver a service of the highest standard. The quality of the team at Standard Life Investments is impressive, and we are looking forward to them joining our business.