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Changes to the International Portfolio Bond on abrdn Wrap

25 January 2024

The Wrap International Portfolio Bond is provided by Standard Life International dac, part of Phoenix Group.

The regulations around how Standard Life International provide the Bond to UK customers have changed.

When the UK left the EU back in 2020, Standard Life International – like many other International Bond providers – was able to continue its operations exactly as it had been before Brexit. This was due to the Temporary Permissions Regime.

This arrangement came to an end on 30 December 2023 and, from that point, they’ll be using their long-standing Jersey Category A licence to continue operations in the UK.

What this means for your clients

This change won’t have any impact on the benefits and tax advantages your clients are currently able to enjoy through their bond, and the high-quality service they receive right now will remain exactly the same after the change takes place.

However, as Standard Life International is resident in the EU and relies on its Jersey Category A licence, the following changes apply from 31 December 2023:

  • Your clients will no longer be able to access the Financial Services Compensation Scheme (FSCS)
    In the unlikely event that Standard Life International becomes insolvent, your clients will no longer be able to call on protections that would have previously been available to them under the FSCS. This change is in line with other international bond providers in the broader market – and, right now, there is no equivalent compensation scheme in Ireland.
  • Clients should refer any complaints to the Financial Services and Pensions Ombudsman of Ireland, rather than the UK Financial Ombudsman Service. 
    If a client were to have a complaint against Standard Life International dac, which couldn’t be resolved within the timeframes set out in their policy conditions, they should refer the matter to the Financial Services and Pensions Ombudsman of Ireland rather than the UK Financial Ombudsman Service.

How Standard Life International dac continues to offer a strong and stable partnership

Standard Life International is authorised by the Central Bank of Ireland (CBI) and must adhere to strict insurance solvency standards – otherwise known as Solvency II.

Under the Solvency II requirements, it needs to identify key risks to its business operations. It also needs to hold sufficient capital to make sure it can not only withstand these risks, but also meet the financial commitments it has made to customers. This capital buffer is known as the Solvency Capital Requirement (SCR).

At the end of 2022, the capital to SCR ratio of Standard life International dac was 233% which is well in excess of its SCR of €329m. By holding more excess capital than SCR, the situation where Standard Life International would be unable to pay customer obligations is very low.

More information

If you’d like to know more about these changes, please speak to your usual abrdn contact.