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Standard&#39s WP fund is a &#39dead parrot&#39, says Cazalet

Standard Life&#39s with-profits fund is like a “dead parrot resting” and is effectively closed in practice, says independent insurance analyst Ned Cazalet.

Cazalet is predicting that bonuses, payouts and equity weightings will be cut in the wake of Standard&#39s strategic review which will consider demutualisation.

He says it effectively looks as though the firm has closed the with-profits fund and that it will now be “trading further down the scale”.

Cazalet says the business has no true excess capital and describes the Standard strategy over the last two years as “getting into a Ferrari in a busy playground and driving at 130mph”, referring to what he says is a loss of more than £12bn capital during that time.

He believes the company might now be worth around £3bn-£4bn, massively down from his estimate of £16bn in 2000, and says people should forget about any idea that this is a “windfall play” if the company does demutualise.

Commerzbank insurance analyst Roman Cizdyn describes the Standard announcement as “dramatic” and believes it is heading towards demutualisation.

He says demutualisation would create a more disciplined market as Standard has not had to answer to shareholders on issues such as pricing and products.

Cazalet says: “Demutualising is a complete about-face on its position. Does that strike you as a strong, robust company? If it was, would Lumsden have his P45 and would the company be taking the action that it is?” Cizdyn says: “It does not look like a company that is a total and utter mess but something needs to be done.”


FSA called on to pre-vet ads

The Financial Services Practitioner Panel has asked the FSA to consider pre-vetting advertising material. The panel says if the FSA is going to be firmer over advertising, as in the case of Chase de Vere which was fined £165,000 over its marketing of structured products in December, firms should be able to have it pre-approved. […]

90% of members happy with IFAP efforts

Nine out of 10 IFA Promotion members are satisfied with its efforts to promote the benefits of independent advice. A survey carried out by IFAP last year revealed that 91 per cent of its members are happy with its work while 67 per cent say their membership represents good value for money. The survey, which […]

Bankhall buys Pru loan club

Bankhall has bought Prudential&#39s mortgage club Premier Mortgage Services for an undisclosed sum thought to be between £4m and £8m. The deal was finalised last week. Prudential had been in negotiations with the Skipton Group over the sale of its mortgage club and Network Data is also believed to have been in the running. PMS […]

Bonus of contention

As part of my latest series looking at the best ways to extract funds from a private company so as to make minimum payments to the authorities, I began last week to consider the topic of dividends. Taking the example of a company paying corporation tax at the rate of 19 per cent which wishes […]


School fees planning

Jeremy Pearson is Technical Support Manager with Canada Life’s ican Technical Services Team. Canada Life offers a range of wealth management solutions, including retirement income planning, estate planning and investment solutions from a choice of jurisdictions, including the UK, Isle of Man and Republic of Ireland. Many parents value the standard of education offered by […]


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