Standard Life is looking to offer with-profits policyholders the chance to switch between funds with high guarantees and charges to funds with lower guarantees and charges in a move welcomed by IFAs.
Managing director of marketing Simon Douglas says the company is considering allowing policyholders to move into funds with higher equity exposure and lower guarantees but it is not yet in a position to make an offer.
However, he says policyholders are not necessarily going to be stuck in their current fund but will have choices.
In a report on Standard Life's recent results, Cazalet Consulting principal Ned Caz-alet says Standard will offer the facility for clients to switch from funds with high guarantees to lower ones, with lower guarantee charges and higher equity content.
Douglas says a switching option would see people get their full transfer value but says switching does not normally pay commission to advisers.
Chartwell Investment Management business development manager Ben Willis believes Standard would not need to pay commission as the application of market value reductions would act as a deterrent to moving out of the company.
If policyholders move to lower-guarantee funds, it could enable Standard to release capital as it would not have to reserve as highly to meet the new reporting requirements.
Willis says: “It is an incredibly generous offer, especially if it is at no charge. I imagine there would be quite a few people who would take them up on it.”
Douglas says: “We are aware that we want to manage this. We do not want to create huge volumes of work for the IFA community, which is part of what we are looking at.”