Standard Life Sterling Fund

Wont_get_fooled_again

I have lost a substantial £amount of money having just invested my entire Pension with Stanadard Life at the end of Nov'08, and am now left in the quandry; should I move the funds elsewhere and take the hit [after just 2 months] or stay with Stand and hope we are at the trough and values will go back up. Like others I feel Stand have misled me by overvaluing my units at time of purchase [the markets must have fallen by 5% over a longer period than the 23rd Dec quoted] and I have written a letter of complaint to John Gill. Does anyone know an e-mail address we can also send our complaints to at Stand life [they appear to only encourage phonecalls].... and who else should complaints be sent to, does anyone know the address at the FSA other than [EMAIL="complaints@fsa.gov.uk"]complaints@fsa.gov.uk[/EMAIL]?

Daytona

shaunrc wrote: »

Before my current employment as an IFA I worked for Standard Life as a tied adviser and I have a stakeholder pension with them which is part of their employees ( ex in my case) stakeholder, so I have some insight on both sides of the coin.
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As a daily priced unit linked fund surely the price should have been changingday by day as particular products/investments come up with problems. Why has it changed all in one day? This beggars belief in my view. Here again Standard Life have serious questions to answer as one cannot reasonably argue that they all fell on one day. If you think about it they are implying recent valuations have been inaccurate and implying their own prices have been misrepresentations.

As someone who's been watching the Markit HFX mortgage backed security (MBS) indices since the crisis broke in 2007 I wholeheartedly agree. Although it may mean that SL have been protecting clients from an average 56% MBS fall, this issue is potentially far more serious for SL.

Unfortunately, until now, I have not been able to post on MSE as the enhanced editor has been playing up, but here's my post on The Motley Fool, including links to the 2006 Q2 Sterling Fund brochure -

http://boards.fool.co.uk/Message.asp?mid=11402397&sort=whole#11414368

I've since sent off the list of questions and will post the answers.

I've uploaded a sample letter of complaint quoting the relevant principles from the Financial Services Authorities (FSA) Conduct of Business Sourcebook (COB) -

http://www.scribd.com/people/documents/110493-daytona

If you don't have a Scribd login, use 1e7tejp02@sneakemail.com as login & password if you wish to download. Feel free to take copies and distribute.

Cross links to conversations in other forums -
http://boards.fool.co.uk/Message.asp?mid=11402397&sort=whole#11403490

cogito

Looks like the backtracking has started.

http://www.citywire.co.uk/adviser/-/news/collective-investments/content.aspx?ID=327541

cogito

Although this comment is unreal:

Group finance director David Nish said that the firm was not taking a 'blanket approach' to reimbursing investors who had lost money when asked whether there was scope for the remediation to be extended to other customers, including those approaching retirement.
‘It’s working at an individual account level and it’s not a blanket approach – you have to work on an individual level,’ said Nish.

You can't just pick and choose who should be compensated, you idiot.

Perfect_Choice

Article on the Sterling Fund in the financial pages of the Daily Mail today, nothing new but gives high visibility to this issue.

Web link to the article is below:

http://www.dailymail.co.uk/money/article-1130009/Pensions-Standard-Life-toxic-trap.html

wonderman

Wont_get_fooled_again wrote: »

I have lost a substantial £amount of money having just invested my entire Pension with Stanadard Life at the end of Nov'08, and am now left in the quandry; should I move the funds elsewhere and take the hit [after just 2 months] or stay with Stand and hope we are at the trough and values will go back up. Like others I feel Stand have misled me by overvaluing my units at time of purchase [the markets must have fallen by 5% over a longer period than the 23rd Dec quoted] and I have written a letter of complaint to John Gill. Does anyone know an e-mail address we can also send our complaints to at Stand life [they appear to only encourage phonecalls].... and who else should complaints be sent to, does anyone know the address at the FSA other than [EMAIL="complaints@fsa.gov.uk"][EMAIL="complaints@fsa.gov.uk?"]complaints@fsa.gov.uk[/email][/EMAIL]?

I suggest you do it the old fashioned way with a letter -to John Gill customer services director at SL and copied to the FSA.

dunstonh

http://www.citywire.co.uk/adviser/-/blogs/investment-solutions/content.aspx?ID=327602&re=4632&ea=196312

may be useful info for you.

EdInvestor

cogito wrote: »

You can't just pick and choose who should be compensated, you idiot.

Tell that to the victims of Equitable Life. :mad:

Mikep_3

I have a 2004 guide from Standard Life: " Your pension investment choices", " intended to give you basic information about the fund choices available......"
The Stakeholder Sterling is one of two choices shown under the Secure heading.
Standard Life say: (it) "is invested wholly in cash - the most stable investment. This fund helps investors who are looking for a temporary home for their investment just before they retire and it is particularly suited to funds set aside for a tax -free lump sum."
Standard Life gave the fund a 1 marking on their fund volatility table, when 1 is more stable, and 7 is less stable.
Thye say that elsewhere in this guide that the Secure Risk Group " does not offer any significant potential for growth, but is does offer a high degree of stablility."
A second leaflet, Where shoud your money go?, also 2004, states:"The Secure group helps to "lock-in" (their inverted commas) your retirement plans by investing any funds set aside for a tax-free lump sum in very stable assets and your planned pension fund in assets that go up and down broadly in line with annuity ( pension) prices. It is suitable for invetsors close to retirement who prefer to protect their investment against falls in the value of their potential pension income......"

mad

I have complained to SL and also have contacted Hargreaves Lansdowne who administer pensions for employees where I work. They have told me that they are taking up the issue with SL and will be writing to members once they have had a response. This is what they sent to me, just in case it is of interest to people:

I thought I would give you some background on how they found themselves in this position.

The cash fund is a Money Market fund which means it invests in more than just cash. Money Market funds can also invest in short term loans such as near-maturity fixed interest investments and floating rate notes; they are also allowed to invest in some asset-backed securities such as mortgage-backed investment portfolios. This means that Money Market funds can suffer capital losses if, as in this case, the value of those asset backed securities falls. This situation appears unprecedented and due to the current world-wide economic situation.

In Standard Life’s defence, in its investment notes for this fund it states that 'the value of the fund can fall and that it is not guaranteed'. The specific wording used to describe the Pension Sterling One Fund in the current Standard Life pension literature reads:

"the fund is invested wholly in cash – the most stable investment. This fund helps investors who are looking for a temporary home for their investment just before they retire and it is particularly suited to funds set aside for a tax free lump sum. In extreme circumstances, it is possible that the value of the fund may fall."

This type of fund is commonplace across insurers’ investment platforms for their pension and investment bond products, with most leading providers offering 'cash funds' with similarly constructed investment remits. However, there are cash funds with less or no such asset-backed securities. Self-invested pension plans usually offer pure 'bank account' options for cash as well as insurers’ traditional cash funds for SIPPS.

This is all well and good, except that the opening line of the fund description states that it is primarily designed for investors looking for a temporary home for their money when the short-term outlook for equities, fixed interest securities and property is uncertain. A loss of nearly 5% does not seem to us to be consistent with this objective. In addition, the fund is used for investors who are approaching retirement and who want Standard Life to automatically move 25% of their pension fund into a safe haven fund To us it seems the kind of investment risks and losses that Standard Life have now delivered to its investors are not consistent with what its investors expected of it.

As a side note, in its letter to investors such as yourself, Standard Life makes reference to a new fund, the Managed Cash Fund (launched in September 2008). The new fund is described by Standard Life as being suitable for “those seeking greater short term certainty” and says the fund is “designed to produce lower levels of volatility and investment returns, …. , that are closely aligned to deposit rates.” In our view, that is precisely what the Pension Sterling Fund should have been doing.

We are also currently in communication with Standard Life and we will write to all members affected shortly.

HL have also asked me to let them know what progress I have with my complaint

I will post the responses I get once I have them