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Abbey move sparks fears over future of ScotMut

IFAs are questioning the future of Scottish Mutual following the decision of parent Abbey National to spurn it in favour of signing a distribution deal with Prudential to sell its Prudence Bond through Abbey&#39s high-street branches.

Abbey is understood to be increasingly weary of injecting capital into its ScotMut subsidiary but has scotched rum-ours that ScotMut is up for sale or is being wound down.

A survey by the With Profits Bond Shop shows that over the last five years, ScotMut&#39s offering was the second-best performer in the market, comfortably beating the Pru Bond.

Informed Choice managing director Nick Bamford says: “What do they know that we don&#39t? Abbey is saying it prefers the Prudential to its own in-house with-profits office. Surely that is reason for us to advise clients not to go with ScotMut.”

Abbey National for Intermediaries director of sales and marketing Ambrose McGinn says: “I expect some reasonable amount of business for Scottish Mutual from IFAs. We have sold a lot of with-profits in the past and we have now chosen to allocate capital elsewhere in the group.”

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