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