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A difficult policy on Standard Life

The fortunes of Standard Life and those of thousands of IFA clients are tied together.

IFAs will have to await the outcome of Standard Life&#39s strategic review before they can decide properly their attitude to the life office as a long-term business partner.

But the outcome of the review also has a massive bearing on what IFAs should be telling clients now.

Advisers will already be considering their stance on recommending the with-profits fund as an investment option until it is clear what the strength of the fund is, the available reserves and the resulting freedom over asset allocation.

They will also be considering what to tell their existing clients with Standard Life policies.

There is no room for sentimentality – Standard should expect advisers to make a cold assessment of the facts of the situation affecting individual clients.

Advisers will be hungry for any information from Standard, the FSA and rating agencies and consultancies which will help them come to a decision. But much still depends on the outcome of the board&#39s review. This could see a demutualisation, a sale of the business or perhaps a sell-off of parts of it.

The life office could also raise the capital of £750m it believes it needs to continue to expand and then decide it is business as usual as a mutual.

The FSA has chosen to make a stand, well aware of the consequences of its actions, but its position is very unlikely to change

The choices rest with Standard Life and its new chief executive Sandy Crombie.

But the life office must make sure advisers are informed of the hows and whys of any decisions and it must listen to their views on the way.

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