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ScotAm attacked for locking 500,000 in low-performing funds

Scottish Amicable is under fire from IFAs for locking nearly 500,000 policyholders into poor-performing funds.


It linked up with six external fund managers in February this year after years of dismal performance from its own fund managers.


But only regular-premium policyholders since February 1998 and single-premium policyholders since September 1998 will be allowed access to the new funds. Some 450,000 ScotAm policyholders are stuck in the life office&#39s funds.


According to Standard & Poor&#39s Micropal, ScotAm&#39s managed fund was placed 106th out of 122 funds over five years to March this year.


Mercury&#39s managed fund, available to newer ScotAm policyholders, was 23rd out of 122. The other links are with Perpetual, Newton, Philips & Drew, PPM and Schroder.


Chase de Vere investment marketing manager Ian Millward says: “It is unfair. It is prejudicial for all long-term clients – they have paid more in charges.”


But ScotAm product director Gavin Stewart says: “The reason is the cost of system development. It is unfortunate for the individual but, for the relatively few people wanting to switch, we thought it was not worth it.”

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