David Nish - Chief Executive Luke Savage - Chief Financial Officer Keith Skeoch - Chief Executive Officer Paul Matthews - Chief Executive Officer, UK and Europe

Lance Burbidge - Autonomous Research Alan Devlin - Barclays Abid Hussain - Societe Generale Oliver Steel - Deutsche Bank Research Gordon Aitken - RBC Capital Markets Ashik Musaddi - JP Morgan Cazenove Ming Zhu - Canaccord Genuity Andrew Sinclair - Bank of America Merrill Lynch Ravi Tanna - Goldman Sachs Barrie Cornes - Panmure Gordon & Co. Ltd.

Well, good morning, everyone. And thank you for joining us all today at Deutsche Bank.

As I’m sure you’re aware, it’s the last time I will be presenting Standard Life’s results before stepping down as CEO. So before beginning the presentation, I’d just like to take a short while to briefly thank everyone who’s helped make Standard Life the company it is today.

Our business is full of dedicated, inspirational people, who work hard every day to do the best that they can for our customers, clients and shareholders. As I pass the baton to Keith today, I know Standard Life is going to be in good hands.

Keith and I’ve worked very closely over the last nine years and I think that has helped greatly in terms of the transition that we’re going through. He’s very much the right person to continue to deliver on our strategy.

And I wish him and everyone in Standard Life, every success for the future. So today’s presentation is going to have a slight shift in format.

I’ll briefly reflect on our business today and the highlights for the first six months. Luke will then walk you through as usual the details of the financials, and then finally, Keith will do the looking ahead.

As normal, our compliance slide. So if we go back to 2010, we set out three things to strongly focus on.

First of all was the transformation of the group and the business, secondly investment for the future, and then thirdly delivery of improved performance, everything supporting the delivery of our progressive dividend policy. Today, Standard Life is in very different shape.

95% of our income reported today now comes from fee-based business. Through the sale of our healthcare business, bank and Canadian businesses, and the acquisition of Ignis and Newton, and also the significant developments in our technology and investment propositions, a lot has been achieved but there’s still always more to do.

Our focus has been in understanding and meeting the long-term saving needs of customers and clients, and investment performance is very much at the heart of our business. Our simple business model is core to how we drive long-term shareholder value.

It’s all about capturing assets, maximizing our revenue, lowering our unit costs, all to generate cash profit to support our progressive dividend policy and investment in the business. And all of these things you’ll see continued progress on today.

Also, through the continuity and clarity of strategy and leadership over the last six years has been a great key to our business success and, as I say, it’s great to be able to pass the baton to Keith later on today. We’ve got good strategic momentum, we’re very well placed for change to the markets in which we operate, and have significant opportunities for future growth.

So now, focusing on the first-half of 2015 and it continues to be busy. We obviously, in the first quarter completed the sale of our Canadian businesses and returned £1.75 billion to our shareholders.

Our global reach is increasing, led by Standard Life Investments, and supported by the strategic partnerships we have round about the globe. And also, we’ve continued to build out our capabilities and distribution network.

We have offices in 23 cities around the world and importantly, 70% of our net inflows have come from outside the UK in the first-half, as our excellent investment performance continues to help attract assets. In the UK, our business has been evolving and keeping pace with both the changing regulatory environment, but also policy developments.

We’re seeing the benefit of being very well positioned to support employers with auto enrollment, with increasing regular inflows as contribution levels and salaries increase. We’re also supporting customers to make informed decisions around their retirement and developing innovative propositions to meet their changing needs.

For example, Standard Life Active Retirement, a proposition designed to balance customers’ short-term need for income with their longer-term need for growth, has shown very strong growth in its first quarter. We are in a unique position of having a leading global asset manager and one of the leading distribution businesses in the UK in the same group.

That gives us significant growth opportunities. The combination allows us to harness the experience and expertise from across the group, to develop and deliver innovative products for the benefit of all our customers and clients.

If we look at the example of MyFolio, this year it will celebrate its fifth anniversary. With nearly £7 billion of assets it is the largest multi-asset risk targeted fund range in the UK market.

One of the key reasons for its success is found in its creation. We brought together the best investment expertise within Standard Life Investments with the customer and advisor insight from our UK business.

MyFolio continues to go from strength to strength with over 80% of the flows coming through our UK distribution business. During the first-half of this year, we delivered Group underlying performance of £299 million, which interestingly was higher than we achieved for the whole of 2011, which by the way included a large amount of annuity and spread risk profit.

We’re generating a growing and sustainable cash flow to support our progressive dividend policy, a track record which is very important to us. And today, I’m pleased to announce an interim dividend up by 7.5%.

Standard Life is in very good shape and it has established good strategic positions in several key markets around the world. We have the foundations in place to continue our transformation to a more global business, with investment performance at its heart.

So with that, I’ll hand over to Luke, who’ll take you through the detail of today’s results.

So we’ve seen a good further progress against that simple business model that David just described as you can see coming through here. We now manage over £302 billion of assets across the group, helped by a strong underlying net flows and overall favorable market movements in spite of volatility that we’ve seen in second quarter.

The high level of assets has enabled us to grow fee revenue to £761 million, combined with our continued focus on cost efficiency, where unit costs have reduced by a further 5 basis points; this resulted in an underlying performance of £299 million, a 9% increase. And if you exclude spread risk, where revenues declined as per the guidance we gave earlier this year, the figure actually increases to 33%.

We also continue to manage the balance sheet efficiently. As David said, we returned £1.75 billion of capital to shareholders in April, following the sale of our Canadian business.

But despite this, our IGD surplus remained strong at £2.6 billion, and we’re very well placed for the introduction of Solvency 2. So, group operating profit, at the bottom of the slide here, you can see it was £290 million.

That’s an increase of £16 million or 16% - 6%, sorry, on last year, while our underlying performance, which removes the impact of a one-off contribution to our with-profits business in Germany, increased from £274 million to £299 million, that’s 9% increase year-on-year. The strong growth in our fee business more than offset the £39 million reduction spread risk income, in line with the guidance we gave back in February.

So fee revenue increased by 17% to £761 million. Now, this represents as David said, 95% of total income, benefiting from growth in average assets under administration.

The increase in expenses was driven by ongoing investment in and expansion of the business, and I’ll come back to this shortly. You’ll see there’s been improvement in our capital management and from the associates and joint ventures.

Now, non-operating items before tax in this occasion amounted to a very significant £961 million because of that sale of Canada. So I’ve included a slide here to break down what else is in there.

And first, you can see the £1.1 billion accounting gain on the Canadian sale. And then secondly, we’ve incurred two charges arising from significant regulatory changes in Hong Kong and Singapore.

In Hong Kong, off the back of those changes, we’ve now ceased sales of our recurring premium insurance-based offerings. And consequently, we’ve moved our DAC run-off assumptions onto a more conservative basis, giving rise to a non-operating charge of £46 million.

Also, in June, we announced that we’re closing our insurance business in Singapore, the results of which we reported within discontinued operations and which include £38 million charge relating to its closure. Thirdly, we announced in late 2014, the closure of our UK staff defined benefit pension scheme to future accruals with effect from April, 2016.

And this has resulted in the £20 million of non-operating costs coming through in the period. And then lastly, there were £45 million of other restructuring costs, which include £17 million from the ongoing integration of the business acquired from Ignis and £26 million from other restructuring activity in both the UK and the Group.

So turning back to our operating performance, let’s draw down into the individual components in that business model starting with our assets. So you can see we’ve increased the assets under administration to £302.1 billion, up by £5.5 billion in the six-month period.

The increase was largely due to good net inflows of £3.4 billion and that was across all of our major channels. Over the period, markets have been volatile, so after the net impact of market movements, the six months was the £2.1 billion you can see here on the slide.

During the period, we saw assets under administration grow by £12.4 billion in quarter one, but we saw much of that in reverse in Q2 as the markets came off. We can unpack that headline net inflow figure, £3.4 billion here.

As I explained back in February, we managed two blocks of assets from older style back book insurance products, which naturally show net outflows. You can see these totals £3 billion in the period, with the majority of those outflows relating to the £42 billion of low margin Phoenix Life books.

If you back those out, it gets us to adjusted net flows from our fee-based propositions of £6.4 billion for the six months. Now, that is a 25% increase over the prior year, and as I said, it derives across all of our major channels: wholesale, institutional, workplace, and retail.

So if we work down the columns on the right hand side, the largest inflows in the period came from wholesale, where the £5.3 billion pounds of net inflows were more than double the prior period and already exceed the total for the whole of 2014. That’s as a result of strong sales of MyFolio, equities, fixed income, real estate and multi-asset.

Moving down, you can see institutional flows remained strong at £1.8 billion. That’s up some 20% on the prior period.

There was £0.5 billion increase in our workplace and retail new fee business in the UK. This was helped by a 15% growth in regular contributions into DC pensions, and by the success of our newer style propositions such as SIPP and Wrap.

If we move now down below the line surpassing the business that saw outflows, we’ve only seen a very modest uptick in our UK retail older outflows, perhaps less than you might have expected, given recently introduced pension freedoms, but more of that later. We also saw an Ignis outflow of £1.9 billion, mainly due to the divestment of a low revenue margin mandate.

So if we come back to the top of the slide, you can see on the right hand side the third-party net flows totals some £7.1 billion, up 78% on the prior period. And those £7.1 billion of net flows for the six months were higher even than many of the full-year flows that you can see on the left of the chart here.

Now, in addition, these net inflows have good revenue yields, for example, through the higher margin wholesale channel. Now, not only are the strengths of these flows pleasing, but you can also see the continuing progress being made in increasing our geographic reach.

So you can see the overseas proportion of net flows increasing from 40% on the left-hand side in 2011, to 70% in the first-half of 2015 on the right. Finally on this slide, I’d point out that the mix of flows can be lumpy, not just in terms of mix between UK and overseas, but also in terms of the absolute quantum in a period.

So you can’t, I’m afraid, just take the half-year figures and multiply by two to get to a full-year number. Here you can see a further breakdown of our geographic reach, with the proportion of net inflows from outside the UK in the left-hand donut increasingly shifting the balance of total third-party assets on the right-hand side.

The growth in our overseas sales reflects both our own international distribution, operating from 14 countries across the globe, as well as benefiting from our strategic partner relationships in the U.S., Canada, India and Japan. You can see Europe was our largest source of net flows in the period, exceeding even that of the UK, and our North American business continued its strong growth with a 36% increase in net inflows to £1.5 billion, so some 21% of the global total.

A particularly pleasing area for us was the growth we saw in Asia, where we’re beginning to see real traction of the back of our activities in the region. Net inflows are now £1.3 billion which, as you can see, represents 18% of the total and indeed or on a par with those from North America.

And those flows are coming from the diverse range of clients including sovereign wealth funds and family offices. To come back to our UK business, we saw a strong momentum in our workplace and retail new businesses, where net inflows grew by £500 million to £2.9 billion in total.

Picking out a couple of drivers of those flows, we saw regular premiums into our workplace pensions reaching £1.4 billion. And in part, that’s a reflection of our success in the auto enrollment market.

As both minimum contribution rates and salaries increase over time, it should provide a secure base for growing future net flows. And our Wrap offering continues to lead the advised platform market, with net flows in the period up 17% to £2.1 billion, with the highest net sales in the advised platform market against the latest available Q1 data.

Now again, these flows tend to be sticky, so they provide a firm foundation for future growth. So enough on assets, let’s turn to revenues.

We’ve seen our fee income increase to £761 million, up some 17%. Now, we acquired Ignis in July 2014, so there are obviously no revenues from this source in the prior period comparison, but as you can see the revenue from Ignis in the first-half of 2015 was £54 million.

Within the remaining increase of £55 million, there have been reductions in revenues earned on UK cash balances and in the sterling equivalent of the European revenues, in Paul’s business, due to the strength of sterling. The rest of the fee business grew by £69 million and that’s 11% from the underlying growth.

Our spread/risk margin emerges mainly through the management of our UK annuity book and there are three core components to this business; new business, existing business, and our ALM activities. Now, as per guidance, the total margin has reduced from £79 million to £40 million, with a contribution from existing business, as you can see, remaining fairly constant at £30 million.

Now, in February, I gave two points of full-year guidance around reduced expectations for both the new business margin and profits from ALM, and that guidance remains valid for the full-year. Firstly, the new business margin for the six months was just £4 million, in line with the guidance given to expect around £10 million or less in the full-year.

Now, that was due to the expected reduction in the margin on annuity sales down from £14 million in the first-half of last year, which was itself already impacted by the announcement in March 2014 on the changes to annuities. Secondly, you can see the spread/risk margin on ALM reduced to just £6 million, reflecting the fact that profits are not evenly spread across the course of the year.

Nevertheless, I would reiterate the guidance given back in February that we expect profits from asset liability management of around £30 million to £40 million for the whole of 2015. The transformation of the group away from spread/risk revenue has been quite dramatic.

In our results today, as David said, fee income now represents 95% of total revenue, a significant increase from even just two years ago where the figure was just over 75%. So we’ve dramatically slowed down the percentage contribution from the spread/risk income, which is consistent with our focus on fee revenues, whilst still managing to grow the overall business.

There’s a further very positive message on unit costs as well, where our scalable business model has allowed us to drive down unit costs even as we invest in and grow the business. So whilst you can see that our totals costs have gone up in absolute terms, our unit costs have continued their downward trend, down 5 basis points to 41 bps.

Now, that is a function of both increased scale from both, the acquisition of Ignis and our organic growth, as well as improved business mix and ongoing strong cost control. As we did with fee revenue, we showed expenses from the Ignis acquisition separately, as well as the favorable impact of the fall in the value of the euro, but the remaining £32 million increase is driven by the increased scale of our business, and the continued investment to support further growth, particularly in Keith’s world of Standard Life Investments.

So, if you put those two together, the growth in revenues and the scalability of our business, on the left hand side I’ve already highlighted the reduction arising from spread/risk margin. So the starting point really is the £235 million after you allow for that guidance.

And on the right hand side, I’ve already touched on the inclusion of Ignis, the £20 million there, so it’s the £235 million to the £279 million that we should really focus on. Now, that increase in our underlying profits is 19%.

Despite our ongoing investment in growing the business, it’s great to see that £0.50 in £1 of new revenue dropping through, so that’s the £55 million versus the £26 million dropping through to the bottom line. And it just demonstrates the ongoing profitability of the new business that we’re putting onto the book.

So, as I say, overall a 19% improvement in that underlying profit. Let’s dig into the returns by business unit.

We can see here how that group underlying performance breaks down and you can see that most of the increase comes from Standard Life Investments aided by the acquisition of Ignis. Whilst we can see that the UK fee business performing strongly, has offset in part the lower spread/risk margin.

In India and China, we’ve also seen strong profit growth, and I’ll come back to those three areas in the subsequent slides. For Europe, you’ll see a reduction in underlying performance, mainly due to the lower ALM profits and also the impact of the strength of sterling against the euro.

And whilst those factors will impact the full-year 2015 outcome for Europe, as I guided to back in February, we would expect underlying performance Europe over the medium term, by which I mean beyond 2015, to trend back towards the £40 million per annum that we’ve achieved in previous years. So, looking at SLI first, you can see the underlying profit of £154 million, an increase of £52 million or 51% on last year.

Excluding Ignis, revenues have increased by some £60 million, benefiting from growth in assets, with third-party assets, excluding strategic partner life business, increasing to £124 billion, on which revenue yields were maintained, as you can see on the right at a strong 53 basis points. The increase in expenses reflects both the high level of assets and the investment to support our ongoing growth.

And as you can see from the yellow circles, our investment performance remains strong, particularly those exceptional figures of 95% and 97% at the three and five year periods, which are key to attracting new inflows. You can also see from the end bars on the charts here, the good progress we’re making on our EBITDA target, which has increased from 36% in the left hand bar for 2014, to 40% in the right hand bar for the first-half of 2015.

And we remain on track to achieve a 45% EBITDA margin by 2017. As you can see here, we continue to see significant growth in both our institutional and our wholesale businesses.

Our institutional assets under management now stand at £65 billion, with net inflows of £1.8 billion and with a client base now spread across 48 countries. And for wholesale, we’re now ranked fourth by assets under management in the UK, whereas we were 25th in that market just seven years ago.

And MyFolio assets, as David touched on, have now reached to around £7 billion, a result of close collaboration across the group, with 86% of that £7 billion distributed through Paul’s business in the UK. The Ignis business is performing very much in line with our expectations.

It contributed £20 million to profit for the six months. As I said in February, fee revenues in 2015 have of course been impacted by the ARGBF outflows from last year, whilst performance fees in this business are historically weighted towards the second-half.

Our expenses for the first-half were £34 million. To give you some context, that’s down from around £50 million at the time of acquisition, so an annualized savings rate running at over £30 million.

And we remain on track to secure the £50 million per annum of cost benefits that we outlined at the time of the acquisition. The assets under management from the business now stand at £55 billion.

The £42 billion of Phoenix Life book, which is in structural run-off, has remained generally stable in terms of assets under management; while the non-life assets have reduced to £13 billion; primarily as a function of the ARGBF outflows and liquidity fund outflows that I touched on in February, together with the low-margin mandate that I referenced just a moment ago. Turning now to our UK business, I’ve already explained the expected reduction of spread risk of £37 million on the left hand side.

And base-lining for this gives the starting profit of £128 million, which we’ve grown to £141 million this year. It’s due to strong progress in our fee business, along with an increase from capital management; it was helped by changes that we made last year to the staff pension arrangements.

Fee revenue, excluding the impact of lower revenue on client cash balances, increased by £17 million, or 6%. This reflects ongoing growth in AUA supported by the strong net inflows for retail new and workplace, with both channels seeing growth of over 20%.

Fee revenue bps remained broadly stable at 61 basis points. Cost discipline and the scalability of the business saw operating expenses remaining flat before the £6 million increase, that you can see in the middle, in investment management fees payable to SLI as a function of growth in assets under management.

Overall, that helped our unit costs reduce some 40 basis points to 39. Overall, we’re well positioned to cope with ongoing changes to the UK savings markets, and for further improvements to profits in the UK, recognizing that this in turn helps earn additional margin within Standard Life Investments.

Looking at the AUA of the UK business, you can see total now stands at £107 billion, up £4 billion over the six months, due to the significant growth in our workplace and retail new businesses. Workplace net assets have now reached £33 billion.

As I said earlier, they are supported by regular contributions totaling £1.4 billion, which will support improvements in net flows in future years, particularly as minimum turnover contribution rates increase. Workplace consistently transfers assets to the retail business as members leave their employer, and these transfers amounted to about £1 billion in the six months.

Our retail new business on the right-hand side grew assets by £3 billion in six months to £40 billion with net flows benefiting from the growth in Wrap that I showed previously, as well as transfers in from workplace. And our retail old business remained stable with assets of £33 billion, and net outflows increased by 9% to £1.2 billion on that book, in part due to the new pensions freedoms.

So let’s touch on those pension freedoms to be seen. When you look at the chart on the left here and look at the trends in the pension outflows, you see a lot of change over the past three years.

So after the budget announcement, there was a sharp reduction in outflows in 2014, as many customers decided to wait for the rule to take place - rule changes to take place in 2015. Then in 2015, we’ve actually seen outflows broadly similar to previous year, but with a big change in the mix with around £200 million being fully encashed, primarily from customers with small savings pots.

And much of this was pent-up demand from the previous year, and in fact, the run rates of those outflows in June are now half the level that we saw back in April. At the same time, while some in the industry have had trouble delivering on basic drawdown functionality, Standard Life’s proposition has been going from strength to strength.

And since the start of the year, we’ve increased assets in drawdown by 12% to £12.9 billion. However, we’re not standing still.

Since April, we’ve launched a non-advised drawdown proposition with an online customer journey investment solutions powered by Standard Life Investments. And this has already accumulated some £140 million of drawdown assets since its launch.

Our India and China businesses were previously referred to Asian emerging markets and have generated an underlying performance of £21 million, up from £12 million in the prior period. Our insurance joint ventures in India and China continue to increase assets and profits.

Our joint venture in India is extremely well positioned for continued growth, with almost 20 million customers, and ranked number two in the private insurance market for new business, whilst in China, we are pleased to see continued progress from our Chinese joint venture, which was, once again, profitable in the period. At the same time, our Hong Kong business is adapting to recent regulatory changes and we expect its performance to be down in the second-half.

So moving on from looking at our results by business line. I explained our new IFRS-based cash generation metric in February and you can see in the right-hand yellow bars here that at £223 million for the six months, it’s up 17% on the same period last year.

And actually if you look across the chart, you can see it’s already £20 million more than the total cash we generated in the whole of 2011, and that’s despite seeing the big reduction in spread/risk revenues that I referred to earlier. So it just demonstrates the very strong growth that we are seeing in our fee business in recent years.

And were we to be sharing underlying performance on this chart, you’d also see there is a very strong correlation between our growth in underlying performance and the cash that we subsequently generate. And that strong cash generation together with the strength of our balance sheet enables us to maintain our progressive dividend policy.

We’ve declared an interim dividend of £0.0602 per share, which is a 7.5% increase on last year’s interim dividend. And that is, of course, in addition to the £1.75 billion of capital we’ve already returned.

Despite this, our IGD surplus remains strong at £2.6 billion and. As I said at the beginning, we remain very well placed for the introduction of Solvency 2, having submitted our internal model application back in May.

So to finish, we’ve delivered strong growth in fee revenue, a 9% increase in underlying performance, a 17% increase in cash generation, and in combination that has underpinned our increased return to shareholders. That concludes my remarks on what I believe is a strong set of numbers, and I’ll hand you over to Keith.

Thank you, Luke, and a very good morning from me. I’d like to complete this morning’s presentations by returning to where David began our long-term strategy with its focus on growing fee-based capital light new business.

It’s a real privilege to be appointed the new CEO at Standard Life, and as the baton passes later today from David to me, I’d just like to take a few minutes to set out the context for the business and our strategy. And clearly, the best place to start is our simple business model.

Under David’s leadership, Standard Life has been transformed into a simpler, but increasingly well diversified business. Asset growth has become the key driver for fee-based revenues, the proven scalability of our platforms is instrumental in continuing to lower unit costs.

The improvement in, and transparency of, profitability and cash generation has become increasingly clear, as has our focus delivering for shareholders. I’ve been part of the team that’s championed the delivery of the simple business model, and under my leadership, it will remain central to how we continue to deliver value for shareholders.

Over the last month, there has been some speculation about whether we are an asset manager or an insurance company. We are, and will remain a combination of both, uniquely positioned to serve the changing needs of institutional and wholesale clients, as well as workplace and retail customers.

The shifting savings and investment landscape is creating plenty of opportunity, which I believe Standard Life is remarkably well placed to take advantage of. The combined strengths of a leading global asset manager and a leading provider of savings, pensions, and retirements solutions working together to meet customer and client needs is very powerful.

It’s particularly powerful at a time when clients and customer needs are changing, and changing across all client and customer segments: institutional, wholesale, workplace, and retail, the columns in this slide. You don’t have to look very far to see that the changes to the marketplace could also be far-reaching, whether it’s the UK budget, yesterday’s announcement on advice, the potential impact of MiFID II, or the continuation of the low inflation and low interest rate environment.

Across the rgoup, our conversations with clients, intermediaries, and customers help us to understand whether their long-term liabilities create a need for income, growth, capital preservation, decumulation, or a combination of all of the above. Active asset management skills across a broad range of asset classes help us to develop innovative products and solutions to help meet changing client and customer needs.

GARS and MyFolio are two excellent examples that have helped drive our asset growth on an industrial scale. We will continue to drive our future growth with a series of fund and proposition launches such as the Enhanced Diversification Growth fund aimed directly at the DC market, the Standard Life Active Retirement proposition, or indeed, the launch of the 1825 advisory business.

Innovation, of course, is only one part of meeting clients and customer needs. Investment expertise must also be accompanied by the ability to deliver investment performance, a massive strength for Standard Life, but also the bedrock for high quality investment content.

Cooperation and collaboration with strategic partners is also the means by which we take advantage of the opportunities to grow our assets in overseas wholesale markets in a cost and capital efficient manner. Our simplified business has built up a well-diversified framework of strategic partnerships to help us grow our assets by expanding our global reach with now clients in 48 countries, as well as expanding our market share in our home market.

So in summary, Standard Life remains extremely well positioned to drive value through taking advantage of the opportunities created by changing client and customer needs. Our clear and consistent strategy puts investments at the heart of what we do, because it’s at the heart of what clients and customers need.

High quality investment content and propositions that also deliver high quality investment performance will therefore deliver higher value for money. Increased cooperation and collaboration will both expand the global reach of Standard Life Investments, but also leverage best in class distribution in the UK.

Cooperation and collaboration is equally critical for the scalability and industrialization of our platform, and our ability to continue to drive down unit costs, which will remain a key area of focus. On a personal note, I’d like to pay tribute to David for all that he has done to transform and simplify Standard Life, and also thank him for his help and support over the last couple of months.

Finally, this is a great business with a unique set of strengths and people which, when brought together to focus on clients and customer needs enables us to generate improving return and value for shareholders through fee-based asset growth. Thank you very much.

And I’ll hand you back to David who is going to chair the Q&A. Thank you.

Great. Thank you, Keith and Luke.

Okay. So, who wants to go first?

We’ll start with Lance at the back, and then we’ll work for and get ourselves across.

Thanks. It’s Lance Burbidge from Autonomous.

Three questions, please. The first is on auto enrolment.

The pensions regulator said recently that 66% of the remaining employers have one to two employees, I wonder how many of those you actually want? And then, more broadly on pension reform, I wonder what’s going to be in your submission on the Green Paper in terms of what you think should happen in terms of reforms?

And finally on SLI, the 53 bps revenue margin, I wonder if Keith could split out the impact of Ignis and then the higher margin funds in terms of what’s driving that lack of movement?

Paul, do you want to kick off on the changing landscape in the UK?

Yes, there are two things. On the smaller auto-enrolment schemes, I mean, it’s not our core market, it’s fair to say, but we’ve built the good to go technology system.

So if you look at the volumes we’re doing at the moment, they’re all self-serve. So we’ve built the system, if an employer wants to auto enroll, and we’ve had numbers of thousands of employers now come on to that, so it’s a self-serve, it’s not restricted to us.

And that’s quite unique for us, very few companies offer that online capability. So we’ll take a number - quite a few still thousands of employers over the next couple of years.

The pension reform side, we’ll have to wait and see really what comes up on that. I think the government has spent quite a lot of time looking at what they want to do and we could all speculate whether they’ll abolish higher rate tax relief or whether they will do matching amounts of money.

So I think probably we’ll just focus on the fact is the majority of the money we still deal with is already in the system. And I think the government are looking at new money coming into the system how they make it better.

We’re uniquely positioned in many ways in that - we are the major of the large provider in workplace. It’s pretty obvious I think that what the government going is, they will continue to, whatever they do, they will keep things in the workplace.

They’ve put a lot of time and energy, so we’ll keep continuing to develop our workplace proposition. We are now seeing a lot more business come through from ISAs.

We’re seeing a lot more business coming through drawdown. And I think, regardless to whatever happens to tax relief more people are going to bundle in the retail space the existing money that they’ve got, more look for advice, that’s why we started 1825.

It’s why the numbers of Wrap, you’ve seen is down gross. So, yes, we will feed back in, but we’ll just focus on workplace, Wrap, consolidation and putting more money through Standard Life Investments.

Keith?

As far as the revenue yields are concerned, obviously, the 53 bps is driven by the continued strength, the £7.1 billion you saw coming through from a combination of wholesale and institutional. I don’t think we’ve actually disclosed the Ignis bps before.

But post the removal of a very low institutional pension mandate, which was the £2 billion, the Ignis book yields about 30 bps at the moment. It’s about, I think about £13 billion of assets.

Okay. Alan?

Thanks. Alan Devlin from Barclays.

A couple of questions. Firstly for Luke, I wonder if you could update us on Solvency, where you are in Solvency 2?

You mentioned you’re well placed for it, any outstanding issues still to be decided, et cetera? And then just secondly on the - you said not to annualize the £7 billion of inflows in the first-half, what is the more normal rate of inflows?

I know GARS is running twice its historical run rate; how much of that is driven by the increase in distribution in Europe and North America or how much is just running above trend? Thanks.

Do you want to kick off Solvency?

I guess on Solvency 2, I’d start by saying that Standard Life has been a long-term supporter of the principles behind Solvency 2. The leveling of the European playing field, improvement in risk management I think is good for the industry and, ultimately therefore good for the customer.

We submitted our model application back in the beginning of May and we’re going through that process along with many other players in the UK. We haven’t put a number out at this point, because there are still areas of uncertainty, not necessarily Standard Life specific, but for the UK industry as a whole.

So, for example, just last week there was some clarification around deferred tax assets that are worth hundreds of millions to people in their capital figures. We under Solvency 1 are very strongly capitalized with the IGD surplus of £2.6 billion that I referred to.

And we believe that under Solvency 2, we will remain very strongly capitalized. I’m just not going to put out a number at this point, until the dust settles, because we will end up spending the rest of the year explaining why it’s moving about.

But I think we are confident that a number of the industry general issues are not significant concerns to us in the same way they are to some of our peers.

Do you want to pick up on the…?

I think that’s a great question and the honest answer is I wish I knew. We tend to benefit from volatility in markets and uncertainty.

I stick to my view that a normal run rate, whatever normal means these days is probably about £400 million a month. We certainly benefited in the first part of the year from Asian assets, which now brought - which brought in the first-half of the year as much as North American assets.

And I think GARS was a reasonable chunk of that. But I would repeat that GARS is about 60% of our gross flows.

We are doing really well in credit, property. We’ve sold some global equity funds as well.

So there is plenty of evidence of those strengths broadening out. Somebody asked me earlier about July.

It’s August 4, even we’re not that quick in terms of the returns coming in.

I think one of the things over the last seven or eight years is this diversification of revenues that is taking place within the group. And it’s really, in many ways that number of 70% of core is now outside the UK coming through, I think, is really quite dramatic.

There is also the pleasing thing round about Paul’s regular premium business; it’s now really beginning to kick in. Moving forward, I see that the guys in the right hand side straining their right arms.

Abid Hussain from Soc Gen. Just two questions, if I can?

What sort of dividend cover should we consider appropriate for, as you say a combined life company and asset manager? That’s my first question.

And the second one, would you consider disclosing of the UK annuity legacy with profits books to remove the headache of managing these into run off, especially now we are moving into Solvency 2?

Keith, do you want to have a go with them?

We have been operating as a combined asset manager and insurance company for some time, so we will stick to our progressive dividend policy. I think, it’s far, far too early to speculate about diversification of books.

The landscape is changing. It’s not just in terms of regulation, it’s what’s happening with advice, et cetera.

We don’t know yet what’s going to come into form. So I think, as ever, we will take a careful look at what’s going on in the marketplace and take strategic decisions in that light.

Paul, I don’t know if there is anything else you’d like to add?

The only thing I’d say is our old book is our new book now. So if you take the last 20/30 years of pension business, those customers are coming up to 55 now, they are moving to a new pension contract.

So I think we will be focused very heavily on other companies’ old books, because their old pension plans will want to come to us. And in our own old book that will become our new book of product especially in many instances.

The dividend cover point, because previously you had stated that you would like to become an asset manager, now you are saying you are transitioning into an asset manager, I think, that’s the phrase that’s been used in the past, and so the dividend cover has gradually come down. So my question was more about, if you’re now are saying you’re not going to become a fully-fledged asset manager, or how should we think of the dividend cover going forward?

Well, just to be clear, I don’t think we have ever stated that we were heading to be an asset manager. We’ve talked about being an asset managing business, where we manage AUMs for institutional and wholesale clients.

We take AUMs through active management, but as part of our proposition, we also have assets under administration, where we build platforms, actually being able to do things in a variety of wrappers for tax efficiency has been incredibly important to the business. So our view has always been that we would be a combination of both, and it’s particularly important that we continue to access all that institutional and wholesale both in the UK and the world offers, as well as what we need for Paul’s business.

That mix has been improving over time. The cash generation that comes off that is clear for everybody to see, and we have been improving the cash support and the clarity of that for the dividend and that’s helped us maintain a progressive dividend policy.

And that’s exactly where we are today, there is no change.

Thanks.

Oliver?

Oliver Steel, Deutsche Bank. I wonder, if you could just give us a little bit of help on expenses going forwards, if you’re able to.

The expenses looked a little bit better than we were - or certainly than I was forecasting. So any guidance you can give on sort of future technology changes you might be putting through and what sort of expenses you think those contribute that would be great.

Also within SLI, I mean, you are investing in the business, but how long does that go on from here? Secondly, I guess for Keith, as a sort of life company come asset manager, do you have any thoughts from previous management on the capital in the business and how much you need to run with?

Okay. Paul, do you want to talk about maybe some of the things we’re focusing on about driving technology in the business?

Yes. I mean, we’re still very much focused on trying to develop what we already have.

So we’ve got a very strong access to customers via workplace, which is typically via an employer and we’re building more direct capability. So we are spending more focus on actually the D2C part of our workplace.

On our retail platforms, same thing again, we’re very connected in with IFAs. We’ve got some more development spend on the technology on the Wrap side.

But, again, more and more focus is going on our customer service capability to push more people online. To give you an example, we could be taking something like 20,000 phone calls a month at the moment, people ringing us for help and advice on their retirement.

We want to push more of those online, so we’ll be spending more investment on that. They’re probably the main areas.

It’s just really building on - it’s not really new, it’s just building on the infrastructure that we already have, but making it more D2C capable, so that the consumer can self-serve far more.

I think one of the things that we’ve strongly seen over the last few years, as the scale comes into the business, we’re able to do it with in many ways a reducing infrastructure, and most of that is really driven by technology. Paul has already mentioned to Lance’s question about the capability to do small scale pension schemes.

You can only do that if you invest in technology and have straight-through processing. There’s big changes planned round about e-mail systems and IVRs and whatnot which, again, we’ll just continue to drive forward.

We can’t say, because obviously we’ve got the issue of looking into how much money we will spend. It’s clear in the branches we have 1,300 people in our customer service operation and we’re needing a lot of those people purely to take demand of more and more customers contacting us.

If you look at the publicity around some of our competitors, a number of our competitors can’t do a drawdown at the moment, so that’s leading to even more people phoning us. So I would expect over time our customer service numbers to reduce in many ways, as the spend on technology takes over and gets people to self-serve as they want to.

Keith, do you want to talk about capital?

Well, I think it’s also a question about Standard Life Investments. I think the answer is, we will continue to invest in people and technology, what’s an asset manager?

It’s no more than a bunch of human capital with technology applied. We continually to have to upgrade that infrastructure as the world develops.

And so I would imagine that an investment refresh rate of somewhere between 10% and 15% is normal in that kind of business. As far as capital is concerned, clearly, part of the simple business model is all about optimizing the balance sheet.

I think we have shown that, where we believe we have surplus capital and no use for it, we will return it to shareholders. And over the long run, that’s exactly where we will be focused on.

If we can’t invest it and deliver a return, we’ll think about returning it. In the short run, we are very much focused on making sure that we have an optimal Solvency 2 balance sheet, and we need to get that over the line.

So it’s highly unlikely we’ll make any decision until we have certainty about the balance sheet. But as a balance loop we believe that’s currently pretty strong.

Gordon.

Thanks. Gordon Aitken from RBC.

First question for Paul, and then one for Keith. Post the pensions’ freedoms, I think I would have expected net inflows in Q2 to be broadly similar to Q1.

I think the others who’ve reported so far have shown that the growth in income drawdown has pretty much been offset by people cashing in their small pots, and you talked a bit about that. But you’ve shown that in Q1 you had £1 billion coming through in net inflow and it’s down to £0.7 billion in Q2, so just wondering what’s going on there?

And the second question for Keith is, when a key metric for an asset manager is net inflows annualized as a proportion of opening assets, in your business, Standard Life Investments, ex the acquisition. I mean, we think it’s probably going to bring in north of 10% on that metric.

As a CEO now, you’re inheriting other businesses which are in, an outflow position, be it build retail products, annuities or Ignis. They’re showing outflows, I know, you’ve stripped them out on the slides, but these will continue to be outflows.

If I look at the first half, I think the annualized net inflow for the group is just 2.3% and I know, over your career, you must have had pockets of business which are showing persistent net outflows. Just wondering how do you use that experience to improve the net inflows for the whole group?

Thanks.

I’ll start. So there’s a number of things, probably worth trying to break that down.

It’s obviously early days to give you a feel for the Q3 and Q4 at the moment, but if I give you a feel for what’s happened in Q1 and Q2. So we’ll turn around your numbers.

If pensions freedom, if you ring us for 55 want to take your cash, we’ll turn that around in about five days as opposed to the market’s three months, probably, at the moment. So we probably, we saw £165 million come out of full encashment.

A number of other - there will be some other monies also going to other companies as people consolidate with somebody else. But we’ve halved our numbers now of people coming in to take full encashment.

5% of customers have been in touch with us, 95% of our customers haven’t. So what you’ve got to try and work out is, people have been waiting 12 months to get hold of their money, so we did see a spike.

And my view is, because we’re quite efficient, you’re probably seeing a reasonable spike from us but that’s halved. So I don’t expect to see huge activity on people accessing money in Q3 and Q4.

I think, if you took the average case size it’s around £14,000. 90% of the money that’s gone has been under £30,000 pots.

So what we’re probably seeing is a clearing of the very small amounts of money that customers have. And I’d expect the majority of people now just to use drawdown.

And we have seen a spike, in the last month or so, where companies just won’t offer drawdown facilities, because they don’t have the technology. So I’m hoping we’ll benefit from the inefficiencies of our competitors of more money coming into drawdown.

So I’d hope to see in the next 12 months, more monies moving to drawdown to us, both internally and externally.

Okay. Thank you.

I could give a very longwinded answer, Gordon, as you know. I think, there are a couple of things that are really, really important.

One is to reflect that, actually, in order to grow assets, you have to deliver high quality investment content that meets client needs. If you can do that in a manner that delivers value for money, then you will grow your propositions.

So it’s never been, and isn’t in my book, about price, piling it high and selling it cheap. Actually, you need to build those high quality propositions, and I think, Paul, was just starting to talk about the opportunities that are coming through.

In the drawdown market, we have to show why we’re different and we have a different - differentiated proposition. I think MyFolio and other things are just the start of that.

Of course, the other issue is, it’s not just about winning assets, it’s about keeping them. And it’s the keeping the assets that map with the quality of the content and the proposition, and also working out how you build a relationship with clients and customers.

I’d love to say there’s a magic wand, there isn’t. I would point out, though, if you look at our book of £302 billion, about £200 billion of that book is actually in growth mode.

And of that, of course, Standard Life Investment’s third-party business is about £124 billion. So there’s a big chunk of books that are growing positively and they will - we can expand market share as the quality of our propositions improve.

And I continue to believe that the changing environment and the changing needs is a massive opportunity for us.

One last thing if I could just add is, Luke, touched about the Active Retirement Fund and Keith touched on it, I mean, it’s still early days yet. Just within the first few months that is our fastest growing fund ever.

We’ve had £90 million go into that in drawdown, 80% of customers that have selected drawdown have gone into active money, and that’s a Standard Life fund. And so it’s still really small, it’s still early days, but if you can imagine the growth of drawdown, if we can continue that, it’s another great invention by Standard Life Investments.

Okay.

So before passing over to the other sites, [ph] I’ve got two questions from Greig, who’s on the web this morning. I think it’s one for Paul and one for Luke.

So Paul, what are the implications of the proposed exit fees cap on the Heritage book? And for Luke, management actions spread business, what is the size of the potential pipeline for those actions?

So the exit charges, Greig, well, probably about 7% of our customers who potentially, if they wanted to retire at 55, could still have some outstanding charges from the original setup date, let’s say it’s 60 or 65. To put that in context, if those customers were to exit at 55, rather than their retirement date, you’ve probably got an average exit charge of about 240 quintal [ph].

So these figures are at less than 1%. It is worth reminding people, though, here why we are perhaps less impacted by others is, we came out of commission in 2004.

One of the reasons that exit charges is a focus by the government regulator is that commission is still being paid off in a lot of these contracts. And if you remember, there were a number of our competitors still paying quite large commission payments up until 2013, and some of them continued into 2014 with workplace.

And I think that’s the focus the government are trying to work out. And that commission needs to be reclaimed, and if customers leave early for drawdown, they’re going to be impacted by that.

But for us, average 55, if they do leave, probably around £240.

And then in terms of the pipeline for ALM activity, we guided at the start of the year towards a figure of £30 million to £40 million for this year, of which you’re seeing just £6 million come into the first half. We stand behind that guidance for the full year.

There is more potential in the book, we’ve never put a number to it in public and I don’t intend to start doing so today.

Okay. Right, so jump across.

Andy?

Thank you very much. I’d just like to say thanks, David, for putting up with me over the years.

We’ve not always agreed but you’ve generally been right. So questions, first of all, on the DB pension scheme change, presumably that has a benefit to the funding position of the pension scheme.

Does that knock on to capital and is that in the numbers we see today? Or do you use the increased solvency of the pension scheme to invest more in infrastructure and things?

And then the second question is about SLI and costs. So we had a lot of inflows in the half-year, so if inflows normalize do costs go down?

So, i.e., is there an element of acquisition-related costs, or are they relatively fixed? Thank you.

Okay. I’ll go with, so in terms of the pension surplus, it’s not in today’s capital numbers.

Under Solvency 2, it does get picked up and does get included and we certainly don’t use any surpluses in the pension scheme to justify investment.

Right, but I think there was an add-on to that…

I was wondering if you had extra surplus in the pension scheme, whether you could change the assets in the pension scheme to get a higher yield, maybe to move into infrastructure or something? Or whether - sorry, that was - I wasn’t suggesting you would kind of [indiscernible].

The asset disposition within the pension scheme is not for us to make the decisions on, it’s for the pension trustees. There is a healthy surplus in that scheme and we work with the pension trustees as to how they choose to invest it.

Actually, if you look at the asset performance over the last six or seven years, it’s really been quite dramatic in increasing the surplus. And in many ways, remember that was where the GARS story was effectively built.

Keith, the same question, cost in SLI.

Well, costs don’t fall but unit costs do. Clearly, over time as assets come on, you improve the technology.

Providing you keep the assets, you’re servicing the same set of assets off a growing cost base. But the asset growth is growing faster than costs, so unit costs come down.

That’s basically the operational leverage in an asset manager.

Ashik, [when they will work along the road] [ph], and…

Yes. Hi, good morning, everyone.

Ashik Musaddi from JP Morgan. A couple of questions.

First of all, with respect to the pension freedom the government has proposed - is working on the consultation of changing the pension tax systems from EET regime to TEE regime, if that goes through, how fast can you turn over your technology to suit that need, and how do you think market will behave in that scenario? Secondly, Keith, would you be able to give us some color about what’s happening with your - other than GARS multi asset fund?

So for example, I think you have three or more new funds within the multi asset suite, other than GARS, so what’s going on with that, when should we expect some pickup from those particular funds? Thank you.

Okay. Do you want to kick off?

To look at the question, right, if the government do make some changes to the tax relief how well positioned are we, is that? I think we’re pretty well positioned actually, because it depends which way they go, I mean, because they’re talking about so many different things at the moment.

They’re talking about whether they might stop paying tax relief at the front and possibly giving tax free at the end. But they’ve also discussed about whether they might do matching premiums.

I mean, the technology is set up. The big company for a company is, do you have the workplace employer relationships, so have you got the scheme set up?

That’s the biggest thing. I keep going on about this, unless you’ve got the workplace schemes in place then you’re struggling, so we have the workplace scheme set up.

What we’d need to do, we’d need to work with the employers depending which way it goes, but we would collect the contribution the same, the employee would then decide whether he wants to pay more to make up for the reduction in tax relief that we’re getting. And then for a payout system we’d have to work out whether we just pay that out net or gross.

I mean, so I don’t think we’re that badly impacted whichever way it goes. The fact is, we’re looking at 36,000, 37,000 employers.

We’ve got something like 1.8 million employees from that point of view. We’ll have a number of self-employed.

Whether they change the tax relief to us it’s relevant, obviously, but what you’ll see is people either paying more contributions but they will still consolidate their pensions and they will still look for investment solutions. I know it’s a bit of strange answer, but I think we’re pretty well positioned whichever happens.

Yes, actually we really have I think four, if you will, GARS extensions. Those are absolute return global bond fund, there’s the GCARS, Global Conservative Absolute Return on the John Hancock platform, there’s our global focus solutions, which looks to deliver LIBOR plus about 7%.

And then, of course, there’s the ex Ignis ARGBF fund. The two absolute return global bond funds, we continue to see steady but moderate flow into - they were always designed to take advantage of an environment where there’s a backup in duration because they look to deliver an absolute return.

Obviously, they’ve been in place for some time. We, allegedly, are getting nearer and nearer to the points at which interest rates back up and there’s a knock on impact on duration, and I think they’re very much fit for purpose.

We’re getting good traction with GFS, Global Focus Solutions, with the consultants. But at the moment, flows remain modest.

And we are just involved in restructuring, including the hire of two key individuals for the ex Ignis ARGBF fund, so that’s something where we’ve seen outflows being reduced and actually seeing an inflow. And it will be a key focus of attention for us over the next year or so, but I would imagine it’s 2016 before that particular fund kicks in to gear and taps into the liquidity end of the absolute return market.

So positive but modest contributions at the moment, which I think will accelerate over the next 18 months.

Ming Zhu, Canaccord. Just one question on pricing, please.

And I think, at the full year, you’ve mentioned that your view on the UK retail new business surprising were quite ridged. But as you’ve built - you’re in quite good advantage in terms of the drawdown, as you mentioned, some of your competitor doesn’t have that capability.

But as your competitors do start to build that capability, and some of them benefit from scale as they merge. And would you - what’s the pricing outlook on your charges, would you look to reduce that pricing?

And similarly on GARS, I think at the full year you’ve mentioned that as AUA start to grow, although some multi asset managers out there did start to reduce their fee charges on multi asset funds, but you would actually may look to increase that charges on GARS, I mean, is that view still the same? Thank you.

Paul, don’t you…

Yes, there are two attunements there. So on the drawdown it’s quite difficult to replicate what we provide because it’s not just a technology, you need to have the trained staff to do this.

So I don’t see huge amounts of competition at the moment, I’m not being complacent, but there aren’t that many people that can offer what we’re offering. I also think the biggest thing that people want is advice with the drawdown and we’ve packaged that now.

So I’m not seeing any pressure whatsoever on our pricing in the drawdown marketplace, and nor do I envisage it for some time. The facts are, we’re getting more and more people ringing us, not less people.

There is a bit of a pricing which I’m not sure whether it covers Keith’s answer, but I’ll just cover it because we have mentioned before about large fund discounts side on platforms. When an advisor gets more assets on their platform, typically around £60 million plus, we do have a mechanism where the pricing reduces for them for what we charge - for what we offer.

So as more advisors are getting through a scale on our Wrap platform the price does become slightly cheaper on the account of that is it’s more sticky because they’ve put their entire business, in many ways, on to our systems. So I’d expect to see still more people using our Wrap more as people, particularly with the sunset clause next year, more and more people are going to move away from supermarkets to a Wrap, but I think the volumes coming through will more than compensate that.

There is no plans to discount GARS, period. It’s been a key strength for us.

And nor am I aware of anybody looking to re-price the GARS book of business. It’s only where we launched a new product, is that we generate a new pricing point.

So GARS is what it is and its price is what it is, and will remain so.

Thanks. It’s Andy Sinclair from BofA Merrill Lynch.

Firstly, cash was up quite a bit stronger than IFRS this time round. I just wondered if you could run us through what the main drivers were for this and what we should expect, going forward, for cash relative to IFRS grow rates?

Secondly, restructuring costs, I think from Slide 8, elsewhere in the group were up from £27 million to £45 million. I just wondered if you could walk us through the main elements of this, and again, what we could expect, going forward.

And finally, on auto enrolment. I just wondered if you could give us an idea of the average contribution levels for auto enrolment customers, as things stand.

Understand it’s going to be going up with the minimums increasing, but just want to get an idea of how much of a pickup that will...

Luke, do you want to pick up the first two and then Paul?

Yes. So the cash generation on underlying performance up at £223 million doesn’t pick up the one or two non-cash items that are going through in IFRS profits.

So for example, some of the non-operating charges out in Asia. And that is the main driver of the difference.

On the restructuring costs, as well as Ignis we had things like some Solvency 2 costs going through, some UK restructuring costs, some group restructuring costs. There’s a whole bag of bits and bobs, which, in combination, helped to drive down our ongoing run rate of costs across the group.

What should we expect for that, going forward?

Sorry?

Looking for the restructuring costs, going forward.

We would expect to see restructuring costs, going forward, as, for example, some of the technology work that Paul, referenced that makes us more efficient in the UK business kicks in, we’d expect to be able to continue to make the platform more efficient and take out bodies.

So auto enrolment, I’ll give you what we do online, which is the smaller schemes, and then I’ll give you the non-small schemes. So on the good to go, which is our automated system where people go on automatically, you’re looking around £75 a month, on average.

That will go up to around £170 a month as they go through the scaling to 8%, assuming no extra contributions from the individual members. And on the ones that aren’t good to go, i.e., the ones we’ve done non-system related, totally, you’re talking about £130 a month, on average.

Again, that will go up, I haven’t got the figure that goes up to, but they’re the main numbers probably wanted to know.

Okay. Thanks.

Okay. Just yours to the left, Andy.

Thanks very much. It’s Ravi Tanna from Goldman Sachs.

I’m just two questions, please. One was going back to the tax relief on pensions and the EET versus the TEE, just wanted to get a sense of whether you actually have a kind of strong position on this.

One of your peers has talked about actively lobbying against - or rather being opposed to the change to a TEE system. Clearly, you’ve said that you’re well set up and positioned regardless of the outcome.

But I’m just wondering what are your preferences, or what is your position on the issue? And the second one was just on financial advice space and perhaps you can give us a little bit of an update on 1825, what your early impressions of that market have been.

I don’t think we have a strong position because, end of the day, the government will decide what they want to do. So I mean, I think it seems more likely they would tinker with the tax relief and move away from higher rate tax, but I don’t want to prejudge that.

So if you take the average contributions I just went through, so our average customer is probably in a workplace scheme, putting in £130 per month or whatever. So take auto enrolment per se, that’s going to continue to go through until 2018, so we’re probably, if not the best we must be one of the best positioned, to pick up the workplace enrolment.

I can’t see the government tinkering with that. They’ve just spent a huge amount of time.

So we’re very well positioned for that, it’s worth remembering that the fact I’ve just given and what it would move up to in contributions, virtually 90% of good-to-go schemes go totally from the Life Investments, so we’re picking up all those new customers. That’s nearly 1 million customers that will be over a five-year period.

But if you take the rest of our business aside, I mean, our business is run on consolidated assets already in the system. So regardless of what the government does on new tax relief, the amount of money you’re talking about, there’s 30 million consumers in the UK with about £1 trillion of assets, you’ve got £1.4 trillion in DC assets already there.

We’re a consolidation business, predominantly. We’re seeing more companies move their schemes to us and we’re seeing more IFAs move their customers’ assets to us.

As a result of that, we’re moving more assets to Keith’s business. So 25% of all our Wrap assets it’s still the fastest growing Wrap in the UK today, with net new assets onto it, and 25% goes into Keith.

So I can’t think of a single business that is in that position of having the two entities. If you add 1825, your last part of the question is, we’re building advice.

We’re building that slowly, in many ways, of acquiring advisors, but we have our academy going now. So I suppose we’re on plan.

Our aim was to have around 150 advisors, I think by the end of next year, we’re well on our way to being there, both internally and externally, of acquiring people. We have a pent-up demand which we are now supplying online as well as phone.

The thing we are still wanting to do are more face to face, but to be fair, we have a lot of IFAs out there that we’re working with that can still take capacity. But we’ll certainly add to that capacity with the size of our 1825 over the next 12 to 18 months.

Hello. It’s Barrie Cornes from Panmure Gordon.

A couple of questions, they are linked. First of all, the outlook for consolidation amongst asset managers, I wonder what your views are there and whether or not Solvency 2 would impact on your ability to take part in any M&A in that space, please.

We’re primarily an organic business. We’ve grown very, very strongly through the delivery of the investment content and investment performance.

Obviously, we took on board Ignis, which we very much saw as a bolt-on acquisition, a very special bolt-on acquisition insofar as it topped up some capacity we had on running life book money. There were some skill sets we thought that were attractive for building our liability aware business, and the financial case spoke for itself.

So we continue to look, but our acquisition criteria are very, very high. We’ll primarily look to build the business through organic growth.

Keith can I’ve - just before coming to Gordon, there’s another question that Greig had online, but I think we’ve answered it, which was round about the implications of pensions tax relief. I think your last answer dealt with that.

Gordon, raise your hand up again.

I mean, I’d just like to wish David, all the best for the rest of your career. I mean, you’ve transitioned Standard Life over the last six years, and over nine years since you’ve been there, from an insurance company to an asset management group, and I think most people would agree that the M&A you’ve done over the years has been exceptional.

On a personal basis, you were my boss for the time I was at Standard Life and I thoroughly enjoyed working with you, so good luck for the future.

Thank you very much, Gordon. That’s really, really kind.

As I say, I used the word, and Keith used it as well, about privilege. And one of the things that just a little - if you’ll forgive me just two seconds, there was something Keith and I managed to do the first night we had a Board dinner.

I managed to really pass the baton to Keith. It was something Sandy Crombie left for me on January 1, 2010 when I took over.

They left a relay baton on my desk, and I was really pleased to be able to pass it onto Keith the other night because it’s been great working with him. And in many ways, to me that signifies when you do run a company, it’s all about thinking about it like a relay race.

It’s all about how do you get the whole team round. It’s not about the individual leg, it’s about the whole businesses there.

So, thank you, Gordon.

Oaky. Are there any other last questions?

Great. Thank you very much.