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Standard urging members to take a long-term view

Standard Life has allied itself with the building society movement in its

fight to stay mutual, warning that the future of fin-ancial services hangs

in the balance.

Chief executive Jim Stretton made a hard-hitting defence of mutuality at

the Building Societies Association conference in Edinburgh last week.

Standard Life has also attacked the FSA for not including past

perform-ance in league tables because they will not allow mutuals to

demonstrate how they have outperformed plcs in the past.

He said boards should realise there are concerns that are more pressing

than calls for demutualisation from some members touting for big windfalls.

Stretton wants mutuals to convince members to embrace long-term benefits

rather than succumbing to the lure of short-term cash handouts.

He said the marketplace would be less competitive if mutuals were forced

into a plc status.

He told the conference that the basic advantage mutuals enjoy is that the

capital of the company is loaned to each generation of customers and they

enjoy its support largely without charge.

He said this has not only served companies well in the past but bodes well

for the future and there is no justification for destroying the benefits of

a mutual for future generations.

Stretton said: “Present customers have the votes but they are not the only

people on whose behalf the board must act. The essence of mutuality is the

co-operative spirit between generations of customers. I hope that the

spirit of the new age dawns before all mutuals are raided by their present

customers for their capital.

“There is a very real thing called society and one of its manifestations

is the mutual company working for the good of all its customers.”

The vote on Standard Life&#39s future status will be held at an EGM on June

27. Postal ballots must be returned by June 23.

Coventry Building Society chief executive Martin Ritchley says: “I firmly

support the stance that Jim Stretton is taking.

“There are parallels to be drawn with the building society sector. It is

clear that if you do not pay dividends to shareholders then policyholders

get a better deal. You only have to look at the performance league tables

to see the evidence of this.”

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