So Citywire report today that between them AXA, Standard Life and Old Mutual (the parent of Skandia) have spent £225m injecting capital into loss-making platforms. Standard lead the pack with a £116m injection to cover a £130m loss (2007-2009), AXA chipped in £47m or so to cover losses in 08/09 and Old Mutual ponied up £62m to cover a £39m loss and presumably paint and fit new carpets in Southampton. The figures come from AKG, by the way.

Now, with some Standard heritage behind me, I do have some sympathy with the fact that introducing platforms to large lifecos just costs more than starting a new firm from scratch. I do buy, to a certain extent, the deep pockets argument inasmuch as platforms are fundamentally large and complex software-as-a-service (SAAS) systems and are Forth Bridge-like in the continuing demands for development.

Incidentally, that painting the Forth Bridge metaphor is going to have to die a death as they’ve come up with a new kind of paint that lasts a lot longer. You’re welcome, trivia fans.

But these sums really are quite large, even if you buy all the strategic arguments. The really scary one is Skandia, who have achieved scale and still haven’t turned a profit. That should be putting the frighteners on Standard Life, AXA and any other larger firms who think that achieving £20-£30bn scale will get them into profit. I suspect that the incremental costs to service that AUA will be greater than these firms have planned for.

No platform so far (forgive the generalisation, happy to be proved wrong) has achieved the administrative efficiencies that new technology should bring, they all require what in other industries would be an unacceptable level of human support. So I guess the question is, how much is too much? And will there come a point where the shareholders call time? Probably not for a while, but anyone charged with writing the analyst powerpoint decks wants to get their story very, very straight.

But that’s not the real question. The real question is, what else can you get for £225m? The lang cat has been finding out!

  • 11 Royal Weddings (you’re still not getting an invite though)
  • 1 total January 2011 football transfer window spend
  • The services of Stephen Hester for 29 years
  • 220 Bugatti Veyrons
  • Kleinwort Benson
  • A fleet of 50 9-person Learjets
  • 4.5 x Fernando Torres
  • 150 private gigs with Kylie
  • Rangyai Island plus the Octopus yacht to sail you there
  • 321,426 iPad 2’s (may take a while to arrive)




Or 3 investment platforms for a few years.