AKG Actuaries and Consultants have conducted their annual investigation into with profits funds from providers.
Top of the tree in terms of transparency were Scottish Widows and Scottish Mutual. The lowest rating in terms of transparency went to Windsor Life's with profits sub fund.
Guy Vanner, Communications Director at AKG said that the survey had assessed how well companies kept their advisers and with profits policyholders informed and reassured they were acting fairly. He also said that the companies were moving towards openness with all concerned.
Mr Vanner did comment that those companies scoring the highest should not sit back and rest on their laurels.
Our View:
With profit policies are difficult to assess at the best of times with many of the facts regarding the running of funds unknown. This makes it hard for both advisers and consumers to compare and invest in the better funds.
With profits funds have come under an immense amount of scrutiny over the last few years, especially as returns have reduced and fund managers have moved out of equity investments and into more secure ones to protect the value of their fund. The benefits of with profits has therefore become marred but many companies are starting to increase their equity holdings again, thereby giving the opportunity for additional growth.
We believe that with profits funds do have a place for certain types of clients but the lack of transparency regarding how the funds are run make it difficult to choose.
We would recommend that anyone thinking of investing in with profits should seek independent financial advice before doing so.