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Axe hangs over ScotProv and ScotMut brands

Abbey National is to consult IFAs as part of a review which could spell the end for brands Scottish Mutual and Scottish Provident.

But despite earlier speculation, Abbey says it has no plans either to sell or close down the ScotMut or ScotProv businesses and will only rev-amp their product ranges.

As part of a back to basics approach, loss-making Abbey has reaffirmed its commitment to the intermediary channel.

However, it says it will look at more outsourcing deals such as selling Prudential&#39s with-profits bonds.

The brand review follows similar moves by rivals such as the Pru, which ditched its Scottish Amicable brand, and Royal London&#39s review of Scottish Life.

Abbey has defended its management of Scottish Mutual&#39s with-profits fund, which has seen its equity backing ratio drift down to 27.7 per cent at February 21. It says policyholders have been served well by its policy of selling equities in a declining market as its fund performance has bettered key rivals.

Rating agency Moody&#39s says it could downgrade ScotMut and ScotProv as it believes support from their parent company could be reduced.

Abbey National for Intermediaries sales and marketing director Ambrose McGinn says: “We are taking an active approach to our brand port-folio and will announce a decision by the end of the year. We will consult IFAs. Selling equities as the markets are going down is sound and prudent management.”

Paul Duckworth IFA principal Paul Duckworth says: “I do not think that the name issue is important for an IFA office as people take their adviser&#39s recommendations. The jury is out on selling equities in a falling market – who knows if equities will rebound?”

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