Hargreaves says that even if the Government does decide to pay compensation to Equitable Life victims, it will take a long time as there will not even be a decision in principle until autumn.
It also warns that any compensation owed will be “fiendishly complicated” to calculate.
Given that many investors in Equitable have actually done better than those in other with profits funds, Hargreaves says it will be difficult and time-consuming to determine which investors have experienced losses that are directly attributable to regulatory failure.
A transfer out of the fund at this stage may or may not exclude the investor from future compensation, but there is also a risk that investors could suffer years of further poor investment performance should they keep their investments there.
Head of pensions research Tom McPhail says: “Equitable investors need to take a realistic view of the possible timing and amount of any future compensation payment for their own personal circumstances.
“This needs to be balanced against the costs and benefits of reinvesting their remaining funds elsewhere in order to achieve the best possible growth on their investments.”