Navigating Transformations in the UK Pensions and Investment Landscape

A conversation with Andy Johnston

In this exclusive interview, James Craven , IGA Co-Founder, sat down ?for a coffee with Andy Johnston , the independent advisor and non-executive director and former Group Chief Marketing Officer at Standard Life Aberdeen plc, to discuss the challenges and opportunities facing the industry as it responds to a rapidly evolving landscape.

James: Welcome Andy. Can you start by telling us a little bit about your background.

Andy: I’ve spent over 25 years working in the asset, wealth management and insurance industries in the UK and internationally. Following the merger between Standard Life and Aberdeen, I was Chief Marketing Officer and Global Head of Strategic Clients. I’m now an independent advisor and non-executive.

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James: Could you share some insights into your decision to transition into a plural career?

Andy: The decision stemmed from a desire to diversify my professional experiences and contribute to different facets of the industry. As an independent advisor, I collaborate with CEOs, Boards, executive teams, and investors, offering a strategic perspective on industry challenges and opportunities.

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James: What do you see as the strategic issues concerning the different parts of the sector – consultants, administrators and asset managers?

Andy: Each business has a unique set of challenges, however, the macro trends I see most firms grappling with are: (i) The acceleration of the shift of DB pensions to end-game; (ii) the transition of wealth to individual investors, and (iii) the impact of new technologies, particularly AI. Each of these has significant ramifications, with firms considering how to diversify their business models, alter their distribution strategies, and assess the opportunity / threat from disruptive technologies.

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James: How are different companies preparing for these shifts?

Andy: It varies enormously. Some are considerably further down the path than others, with strategies developed. This can involve significant change – for example, examining where they play on the value chain. Others are further behind – often where they are dealing with an influx of new business. Paradoxically, many consultancies have had record years, but are acutely aware of the future trends. Creating the space and time to think strategically whilst managing client demand is difficult balance to strike.

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James: What do you see as implications of the transition of wealth to individual investors?

Andy: As DB pension scheme move to end-game, the focus inevitably turns to individual investors – be it DC, wealth management, investment solutions. The wealth sector is also incredibly dynamic with an increasing number of market participants seeking to participate in one form or another. It’s logical that this sector is a focus for many, but the competition is intense and therefore any diversification strategy needs careful consideration.

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James: You mentioned the increasing role of technology. How do you foresee the role of Generative AI will impact the sector, given your involvement in the FinTech universe?

Andy: I advise the Board of a fast-growing AI FinTech – and so I can clearly see the disruptive power of this technology. All industries – including pensions and investments - will be profoundly impacted. Many Boards and C-suites are grappling with how to balance value creation with risk management, but require new talent and skillsets to help.

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James: Finally, what are your thoughts on the future of the industry?

Andy: It’s an incredibly exciting time for the industry. It’s the most dynamic time I can remember, and the forces shaping the market ?will affect all organisations. This will require them to review their market positioning and capabilities - including talent, culture, technology and governance. Where there’s change, there’s opportunity.?

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• Andy is an independent advisor, working in a non-executive or advisory capacity. He is currently the independent non-executive chair of the ESG Committee for River Global Investors, and a Board Advisor to Aveni, an award winning FinTech. Recent advisory clients include Cardano and Redington. Andy was previously Chief Marketing Officer and Global Head of Strategic Clients at Standard Life Aberdeen plc.