The move by Standard Life to demutualise is a blow to UK investors and to IFAs. It limits choice and will hasten the pace of consolidation even if, for the moment, Standard remains independent.
No one should be surprised about the board's decision to recommend a move to plc status. The FSA's insistence on changes to the way the with-profits fund was run probably made it inevitable. Standard itself argues that, with the percentage of customers in the with-profits fund falling compared with other parts of the business, mutual ownership was not sustainable.
But was it the FSA's fault? That is a debatable point. Several factors combined to bring Standard to this position, in particular, its own policy on guarantees and a cavalier asset allocation decision when markets were falling. It was Standard's own decisions that brought it to a position where what had been one of the strongest funds in the country was the subject of intense regulatory scrutiny. Then and only then should there be a consideration of whether the FSA's actions were Draconian.
Standard could have been given some leeway at least on the timetable. The forced selling of equities and crystallisation of losses for policyholders this year might have been avoided with a little more flexibility.
So much for the blame game. It is unlikely that a pro-mutuality campaign has any chance against the board's recommendation although the two-year timetable is worryingly long. As for IFAs, they will consider what is best for their clients. This newspaper has always considered that mutuals offer valuable choice and hopes other mutuals on the life side and the building societies continue to prosper. But Standard Life is joining the ranks of the plcs. Money Marketing hopes that in the transition some of the best aspects of the company's philosophy and way of doing business can be preserved.