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Mutual friends and foes

IFAs are split over the prospects of losing a mutual.

Some advisers say a flotation of Standard Life will make the life sector less competitive. Others see flotation as a way to give Standard the flexibility to compete.

Hargreaves Lansdown head of pension research Tom McPhail says: “Standard will probably demutualise in about two years but it would be a great loss to the sector to lose its biggest mutual. A plc&#39s principal objective is to take as much cash off customers as possible and give it to the shareholders. It has been extremely valuable having a mutual there.”

Dennehy Weller managing director Brian Dennehy says: “I am very positive. Standard has been growing business by using the with-profits fund. If it demutualises, it will be using capital raised externally instead. I cannot see one negative aspect to this announcement.”

Intelligent Pensions director Steve Patterson says: “This is bound to compromise their future bonus declarations so I would be less likely to recommend them although there are no real risks as long as they are able to maintain their equity exposure.”

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