AS IT SEE IT: Terry Murden says the rebranded Standard Life Aberdeen could be short-lived if Stephen Bird’s strategy falters
There may be some uncertainty about the future of this year’s Edinburgh Fringe but we already have a live contender for the best joke of the year. And it’s a cracker. Or should that be ‘crckr’? The much-anticipated rebranding of one of Scotland’s biggest and oldest companies as ‘Abrdn’ turned it into a laughing stock on social media and raised eyebrows in the City. Like the rest of us, investors and analysts were not even sure how to pronounce it.
The new moniker emerged from talks with marketing agency Wolff Olins whose clients include hip brands like TikTok, Google TV, and Virgin Media. Somebody appears to have been watching too many episodes of the television quiz show Only Connect which has a round featuring missing vowels and persuaded the Standard Life Aberdeen board that they would be down with the kids if they followed suit. But as one punter on Twitter pointed out, vowel-dropping was in vogue when Twitter limited its users to 140 characters. Users can now write their expletives and other venom in full. And they turned a lot of it on those behind the rebranding of one of Edinburgh’s institutions.
Perhaps most worrying about this episode is the potential long term reputational damage that could be caused from the public backlash, particularly to a company entrusted with investing billions on our behalf. After all, if they can’t judge the market’s response to a daft name, how can we expect them to make the right decisions with our money?
One analyst said the contrived new name and the problem of how to spell or say it might well deter investors. As it turned out the shares closed the session 2.02% higher at 277.5p, though it’s doubtful that it was due to a rush to buy among the new brand’s few supporters. The shares are actually 31% up over the year, though this is from a low point and has been in response to recent disposals and some faith in new CEO Stephen Bird’s plans. Over the three years since Standard Life and Aberdeen Asset Management completed their merger the shares are down 26%, leaving the company valued at £6 billion compared to the £11bn market cap at the time of the deal.
Mr Bird has ushered in the new name as part of a rejuvenation of the business, although rebranding has been a regular topic of conversation in the Standard Life boardroom for a number of years. Both the words Standard and Life have had their detractors, but the company missed an opportunity to tidy up its parent name and multiple sub-brands in the merger with Martin Gilbert’s business. Standard Life Aberdeen never seemed to work as a name for a company based in Edinburgh and its main operating business Aberdeen Standard Investments just added to the confusion.
The new brand has become a nationwide topic of debate, but it may be short-lived. There are those who are focused on the names of potential bidders. At the time of the merger Standard Life Aberdeen was Europe’s biggest listed fund manager. At its current price, the slimmed down and re-focused company may be seen as a bit of a snip. Big North American funds would have no trouble financing a bid in the region of £8 billion.
Since the merger SLA has developed an affinity with Phoenix, which now owns its insurance business, was then handed the keys to Standard LIfe’s former HQ in Lothian Road, and recently acquired the Standard Life brand. If Mr Bird’s strategy for reviving the company doesn’t take off then maybe Phoenix, which has enjoyed a rebirth of its own in recent years, will fancy picking up what is left of the business. It might even account for the missing vowels in the price.
Terry Murden formerly held senior positions at The Sunday Times, The Scotsman, Scotland on Sunday and The Northern Echo and is now editor of Daily Business