standard life windfalls £250 fixed payment ??

Edna_Bucket_2

People's_Will wrote:

There are very few £20 SHP holders among Standard Life's 2.4m members and they will not feature in the board's decision on the level of the fixed rate windfall.

As the stock market shows signs of a significant recovery it seems odd that Standard is courting controversy. It is established past industry practice to fix £500 as the basic minimum for loss of membership & voting rights.

Indeed - you put it much better than me PW, and I would endorse your logic rather than carnet's. On current valuations of other insurers we ought to be looking at nearer £8bn for StL surely?

£500 is the historical precedent - I wouldn't see Scot Am or NPI as being comparable in any way.

dunstonh

Although Standard Life are still short of money. So the less they pay out, the better it is going to be. They also have to budget for the mass exodus that will occur after demutualization.

EdInvestor

Given that the average policy size at Standard Life is only 14k, I too believe that Standard should follow recent industry practice and set a basic minimum of 500 pounds which will benefit the majority.

Stockmarket valuations have indeed improved markedly since the mutual announced its need to float a couple of years ago - a valuation of 8bn for the company now looks much more realistic than the 4bn widely mentioned at the time - and that 8bn figure could rise further if the market does well this coming year.

The sooner the company stops mentioning the 250 quid figure the better IMHO - this was the figure they touted in 2000 to try and get people to vote against Fred Woollard's DM effort.Mentioning it now simply reminds everyone of how much they have lost because of this (and other) major management mistakes.

It leaves a nasty bitter taste.

People's_Will

dunstonh wrote:

the less they pay out, the better it is going to be.

There are flotation expenses but Standard is not going to pay out anything to investors when it floats. It is issuing shares.

carnet wrote:

IIRC there are about 400,000 "recent" members, the vast majority undoubtedy holding £20 SHP "bagger's specials"

I agree with all your last post, carnet, but where do you get this curious idea?

It's more likely to be 2,000 SHP baggers IMHO than 200,000+ . To most people, it didn't seem worth the trouble given all the hassle of money laundering regulations, form filling and Standard Life's signaway clause.

In fact Standard took a 61% increase in single premium business in 2001 but stakeholder sales were very slow.

A respectable £500 fixed rate windfall will also benefit recent bona fide investors with more substantial sums of money, as the variable rate windfall will be calculated on time with the company as much as the amount invested. These people's interests need to be considered. They will also be faced with worry and difficult decisions as the press debates what the loss of mutuality may mean for investment returns, not just in the next five years but the next twenty five years.

bilbo_2

People's_Will wrote:

It's more likely to be 2,000 SHP baggers IMHO than 200,000+ .

there will have been more people than 2000 who will have joined from reading this board on its own and then theres the knock on effect.

man telling rest of family invest £20 and it will turn into £500 in the next 5 or 6 years and so on and so on

EdInvestor

carnet wrote:

IIRC there are about 400,000 "recent" members, the vast majority undoubtedy holding £20 SHP "bagger's specials" - and, unfortunately, SLAC needs their votes, as they will mainly all vote - unlike over half the long standing members .

I wouldn't be surprised if quite a big chunk of the "recent " members weren't actually long standing members with maturing endowments, rolling some of the money over into a WP bond in order to get a windfall.

People's_Will

A higher fixed windfall would be fairer to these people as Standard only counts their membership "time" from the start of their latest investment.

carnet

People's_Will wrote:

I agree with all your last post, carnet, but where do you get this curious idea?

It's more likely to be 2,000 SHP baggers IMHO than 200,000+ . To most people, it didn't seem worth the trouble given all the hassle of money laundering regulations, form filling and Standard Life's signaway clause.

The figure of 400,000 was quoted as the number of "signaways" who would now benefit from a windfall at the time SLAC waived this clause.

You have answered your own question . Who else but baggers would take out a WP policy in recent years (apart from the (probably relatively few) "rollovers" into a WP Bond) :rolleyes: - it was a widely held view within the "bagging community" that SLAC would have to waive the signaway.

Your figure of 2,000 is fantasy - there were certainly many times that via The Money Bag website alone, which has been advocating the £20 SHP route since their introduction - and there are doubtless many other sites which have been doing the same.

EdInvestor

carnet wrote:

Who else but baggers would take out a WP policy in recent years (apart from the (probably relatively few) "rollovers" into a WP Bond)

GPP pensions might be another source of new members - there's been a lot of that business done as final salary pensions started closing down. People might well have put a bit of money into the WP fund alongside other fund choices.

I suppose you'd call them "baggers", would you carnet?

People's_Will

carnet wrote:

Who else but baggers would take out a WP policy in recent years.

I know two friends who did so on the advice of an IFA.

Standard took masses of new money in 2001 and 2002 (well over twice their business in 1999 & 2000) when with profits was not yet a dirty word, except in conjunction with Equitable Life, and when Standard still seemed to be a strong, well capitalised company.

The investments made in those years were done primarily as a [mistaken] flight to quality.

IFAs continued to give Standard their top awards until 2004.