Standard Life is trying to persuade investors to stay in its with-profits fund after demutualisation, following speculation that many independent financial advisers will transfer their clients.
They have warned that an outflow of money from the with-profits fund will trigger the use of market value reductions to ensure that all policyholders are treated as fairly as possible, and have said that they have 'ringfenced' the fund, so it will remain 100% owned by its policyholders, compared to 90% policyholder/10% shareholder split of other companies with-profit funds.
The provider has also said that there are different asset allocations within the fund, and that some of the better publicised low-equity allocations relate to with-profits funds with guarantees attached.
Our view
It is likely that many financial advisers will suggest the investors move out of with profits. The reality is that if too many leave then heavier market value penalties will be applied.
The choice to leave or stay is a individual one and will need professional guidance. Got a Standard Life plan? Book a callback from us.