Those who know me will be surprised by the following statement:
I feel a bit sorry for Standard Life today.
OK, as you were. This blog isn’t really about SL. It’s about SUPERCLEAN and it just so happens that SL is first to the party.
The Edinburgh titan’s superclean announcement has generated a resounding ‘meh’ from the industry today with its announcement of 7 of the promised 15 groups who will do SUPERCLEAN washes-whiter deals, averaging 9bps better than the ordinary clean rate.
Of those 7, two are the same company (Cazenove and Schroders) and one imagines that Standard Life Investments would have found it hard to say no. So we have a bit of a patchy start to the wholeÃÂ SUPERCLEAN thing.
That’s probably not Standard’s fault. The remaining 8 are still fankling around, with 4 having not yet agreed terms and the rest doing something else, maybe playing Grand Theft Auto 5 or something.
I’m not sure SUPERCLEAN will work. I’m concerned that, given the mechanical way in which fund houses calculate additional expenses, that smaller discounted share classes will have higher additional expenses than standard retail classes, and the TER may end up being very similar. If that happens then the TCO (ho ho, acronym central, Total Cost of Ownership) by the time you take platform pricing of the larger players into account, may be less than funky. It may in fact be, and I don’t want to alarm anyone here, unfunky.
But I do feel a bit bad for SL here, mainly because I know some of the people there and I know a lot’s gone into this. But for anyone else planning to go down this road – be careful of overclaiming. You get the news cycle when you do, and that’s job well done. But all that’s forgotten when the announcement finally comes out and can’t fulfil its former promise. That’s what’s happened here, and it’s a case of not with a bang, but a whimper.
By the way, SL has also hinted at its new pricing structure; I’ll blog on that when it comes out (and send an update to subscribers to the pricing guide, which you can BUY HERE).
But never mind. In 5 billion years the earth will be swallowed by a rapidly expanding sun, and none of this will seem important any more.