There will be few tears shed in Edinburgh over the departure of Trevor Matthews. The straight-talking Aussie did wonders for the life and pensions arm of Standard Life, resuscitating what was a moribund division, but he rubbed some of his colleagues up the wrong way in the process. He was never one of them.

Before the to-ings and fro-ings of the past few days, he was seen as a serious candidate to succeed Sandy Crombie as chief executive. One theory is that he was definitively told that there was no immediate vacancy, hence yesterday's hasty and clumsily handled defection.

For Standard Life, the departure leaves one fewer internal candidate in the frame, though either David Nish, the finance director, or Keith Skeoch, the investments chief, would make respectable candidates. There is no real urgency since Crombie has at least another year before he retires.

It is hard to know yet whether Matthews is the right man for Friends because it hasn't yet revealed the direction it wants to take in the wake of its failed merger with Resolution Life. Tomorrow's strategy briefing should put some meat on the bones.

Matthews is highly regarded as an operations man with great sales and marketing skills, but has less experience in strategic turnarounds, cost-cutting and capital-raising, all areas Friends may need to tackle.

The immediate problem is what to do about the F&C stake. Friends owns 52 per cent of the listed fund management company but offloading it for a good price - if that is what it chooses to do - will not be easy.

The timing is terrible. A year ago buyers could be found for any fund manager, even one like F&C with its patchy performance record and a history of losing mandates. Today the sector is deeply out of favour, thanks to choppy markets, demoralised retail investors and sentiment-souring events such as New Star's recent profits warning.

But there's another problem. F&C is entangled with Friends because of mandates that it has to manage the life insurer's funds. Disentangling them will either lower F&C's price or lock Friends into long-term contracts it may later regret.

By appointing Matthews, Friends has at least installed a leader capable of showing staff and shareholders that the company could have an independent future. Even if he's only there to put up a fight and wrest a higher price from would-be bidders, it will be worth it. In such difficult times, Friends could not go rudderless for much longer.

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