Standard Life has been accused of hypocrisy and not treating its customers fairly by running seminars on alternatives to with-profits funds despite still applying high market value reductions on some of its policies.
Buckles Investment Services director Steve Daborn says many customers are trapped in with-profits funds because of the MVRs and that other providers offer better returns and have lower MVRs.
Daborn says he was angered to get an invitation to a Standard seminar on alternatives to with-profits when one of his clients is trapped in the fund by an MVR of 22.3 per cent and his policy has only seen 14.3 per cent growth.
He says: “I can promise you that our firm will not be moving money from Standard Life’s with-profit funds to its own platform. Why should it get any money from our customers when it has treated them so badly? Standard certainly has not treated customers fairly and the FSA should take note.”
Bestinvest head of comm-unications Justin Modray says: “Starting to promote alternatives to with-profits already is a hypocritical move. It is a bit rich trying to offer the retention strategy before their customers are able to get out of their with-profits fund.”
Modray says Standard Life could be stretching the rules on TCF to reduce MVRs more slowly than other providers in a bid to prevent a mass exodus of policyholders once MVRs are removed altogether.
Standard Life actuarial director Jim Black says: “The bigger MVRs mean the guarantees that belong to that policy are quite valuable. We have discussed our position with the FSA and are convinced we are treating customers fairly.”