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Wide disparity between best and worst closed WP funds

There is a wide disparity among closed with-profits funds, with Prudential proving to be a top performer and AMP, Britannic and Equitable Life funds lagging behind the rest of the field, according to the latest report from consulting actuaries AKG.

The UK Life Office Closed With-Profits Fund report, published last week, says that while being closed does not necessarily mean that a fund is bad, a significant number are weak and lacking in real performance potential and transparency. At the same time, it says there are closed funds being run well by secure companies.

The report shows that Prudential&#39s Scottish Amicable insurance fund took the top spot with a rating of five out of five for financial strength, four for future performance and four for transparency.

The next highest achievers are Scottish Equitable&#39s unitised with-profits fund with four for all categories followed by Royal & Sun Alliance&#39s Phoenix assurance participation fund with fours for financial strength and future performance and one for transparency.

At the opposite end is AMP&#39s London Life with-profits fund, Britannic&#39s Alba Life ordinary long-term fund and Equitable Life&#39s sterling with-profits fund, all of which get one in all categories.

Prudential intermediary spokesman Darragh Leeson says: “These ratings will reassure advisers that this fund remains financially strong while also confirming that the arrangements and safeguards that were put in place when Prudential bought Scottish Amicable in 1997 continue to work to protect the interests of policyholders.”

A source close to AMP says: “All the AMP UK funds, including those of London Life, are financially secure and strong and continue to be solvent on a statutory or regulatory basis. The reduction in the equity holdings of the London Life fund and other AMP UK funds means that there is much less risk carried by these funds.”

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