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Firms should take Skandia approach

A national newspaper had an article on August 20 saying that the Financial Services Authority had said that at least Equitable Life had good investment portfolio. That&#39s all right, then.

Let us hope that the good investments did not include such blue-chips as Marks & Spencer and ICI which have gone down against the All Share in the last few years.

With-profits funds have have been managed extremely badly, not only by Equitable Life. Actuaries seem to have no idea of the principle of smoothing and several companies have said that the last two years have had unprecedentedly bad returns.

This is absolute rubbish and if they look back a few years they will find there is nothing unprecedented recently at all.

The whole point of with-profits is to put sums aside in the good years to make up in the lean and, of course, there has been far too much reliance in recent years on the terminal bonus which proved to be transitory at worst.

I think Skandia have a better idea with their guaranteed fund which pays bonuses as it goes along and has no terminal bonus. I wish others would do the same.

BGW Jamieson

Jamieson Financial Management,

Bognor Regis,

West Sussex


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