A stone&#39s throw from conversion?

It has been like a mini general election. The battle for Standard Life&#39s

future began haltingly with a botched resolution in February and started in

earnest with an approved resolution in mid-April. Polling day is June 27

and, if the early indications are to be believed, the result is too close

to call.

It should not be this way. Standard Life is Europe&#39s biggest mutual and

has a financial rating of AAA. By and large, its performance has been solid

and reliable. It recently launched a highly successful internet bank.

Ranged against this Edinburgh powerhouse is Fred Woollard. At first sight,

Woollard is not the man you would choose to send into battle against a

massive financial institution with millions of members and bottomless

resources. If you saw a picture of him, you would think he had been

arrested for spreading the Love Bug virus. He looks nerdy. So, how has he

got himself to within a cat&#39s whisker of forcing Standard Life to go

public?

New Labour will tell you, rightly, that campaigning goes on all year

round. In IFAs, Standard Life has a clearly defined cons-tituency that it

could, and should, have wooed on the issue of mutuality. It has not.

Nor has Standard Life wooed its customers until now. Maddison Monetary

Management managing director Mark Howard says: “Standard Life should have

been communicating directly with its customers years ago.” Most customers

are probably reminded of the fact that they have policies with the company

via an incomprehensible statement received once a year. They may receive a

newsletter. But they have nothing tangible to tell them why they should be

with a mutual company.

Do they have a membership certificate? Do they receive discounts on

products which non-members do not receive? Do they get told in black and

white each year how they have benefited financially from being part of a

mutual?

Bygones are bygones, though. The campaign is under way. As far as the

media are concerned, Standard Life has not performed well. As one

journalist put it to me: “Standard Life has been all over the place. By

contrast, Woollard is a PR genius.”

Woollard from the start has made himself accessible. He has been honest

with the press, his only hint of shadiness being his refusal to name his

backers. He has, however, admitted his Monaco warts and all his loot. He

has portrayed himself as the little guy, David, taking on Goliath.

Standard Life, on the other hand, is seen as remote and inaccessible.

There is no sense of a grass roots movement of members wishing to stay

mutual, only millions of pounds of their money being used at a late stage

to win them over.

Standard is also seen as inconsistent by the media. It began by saying

that policyholders would lose out but has now admitted that the legal rules

surrounding demutualisation means they will not lose out.

Its ballot papers have been described by the electoral reform society as

“one-sided and biased”.

Standard Life has threatened to sue the colourful financial analyst Ned

Cazalet for making uncomfortable points and have conspicuously failed to

serve the writ.

Events have not helped, as Harold MacMillan would have said. For example,

the concern over endowment payments, coupled with Standard Life&#39s refusal

to write to members until after the vote. The decision by Dresdner and

Barclays Global Investors to back the carpetbaggers. The decision by

Friends Provident to float without a fight.

In short, Standard Life has been forced to climb down or obfuscate on more

than one occasion. Woollard has not. One is defensive, the other is

confident.

Basically, it all comes down to case making. Standard Life has had

difficulty putting across its case. Woollard&#39s message has been simple –

the policyholder will make money, charity and staff will receive windfalls

and the law will ensure that no one loses out.

Unfortunately for Standard Life, the benefits of mutuality are harder to

articulate – the customers come first (don&#39t they in any business?) and

future generations do not lose out (why shouldn&#39t they, I don&#39t know them).

Even financial analyses that have backed Standard Life&#39s case, such as

HSBC&#39s, have not been spun in any populist way. It is no good saying, as

HSBC did, that returns would be 0.7 per cent lower each year if the

business goes public. Spell that out in pounds, shillings and pence.

It is never sensible to make predictions about election results. It may

be, with the carpetbaggers requiring 75 per cent of the vote to

demutualise, that Standard will just shade it. But it is also likely that a

simple majority will back demutualisation.

If that happens, Standard Life will have won the battle and not the war.

It had better have a better stockpile of weapons if it has to meet its

opponents on the battlefield again.