Standard Life Sterling Fund

dunlosing

Good guidance here for us all when we correspond with SL.

sabretoothtigger

[FONT=verdana,arial,helvetica,sans-serif]Some investors in Standard Life PLC's (SL.LN) GBP2 billion Pension Sterling fund said they are considering filing formal complaints against the company, saying that marketing for the fund was misleading, and the U.K. Shareholders Association said it is ready to help investors on their claims.

[FONT=verdana,arial,helvetica,sans-serif]Standard Life's Pension Sterling fund used to be worth GBP2.4 billion and was thought of as a safe investment until Standard Life cut its value to GBP2 billion on Jan. 14, effectively cutting the average deposit of some 100,000 investors by an average of 5% to GBP18,200 from GBP19,100.

[/FONT] [FONT=verdana,arial,helvetica,sans-serif]The company said the cut reflected a corresponding fall in the underlying value of the assets held within the fund.[/FONT]
[FONT=verdana,arial,helvetica,sans-serif]The debate raises the question of whether financial institutions in the U.K. are clearly explaining to investors the risks, guarantees and assets attached to their investment products.

[/FONT] [FONT=verdana,arial,helvetica,sans-serif]While no formal group of investors appears to have been formed yet, some investors have been airing their grievances online.

[/FONT] [FONT=verdana,arial,helvetica,sans-serif]One is Patrick Collier, a 59-year-old retired insurance practitioner from Devon, who said he understood the Sterling fund was invested only in cash deposits. Collier said he has lost GBP6,700 because of the unexpected revaluation of the fund.

[/FONT] [FONT=verdana,arial,helvetica,sans-serif]Contrary to what some investors expected, 44% of the fund was invested in asset-backed securities or floating rate notes.

[/FONT] [FONT=verdana,arial,helvetica,sans-serif]Some types of complex products like mortgage- and asset-backed securities have fallen in value and are seen as contributors to the credit crunch and the financial crisis.

[/FONT] [FONT=verdana,arial,helvetica,sans-serif]Standard Life said the asset-backed securities in its fund "have no connection to the U.S. subprime mortgage market or anything that might be fairly described as 'toxic assets.'"[/FONT]
[FONT=verdana,arial,helvetica,sans-serif]Collier said his documents show that the fund was "described as a cash fund which according to them (Standard Life) is as follows: 'Investing in cash means putting your money on deposit (for example, in a bank account) where it earns interest. This does offer more security than equities, property or bonds, but has less potential for growth.'"

[/FONT] [FONT=verdana,arial,helvetica,sans-serif]"Their marketing was misleading. They should recompense people like me who have been misled," Collier told Dow Jones Newswires on Wednesday.[/FONT]
[FONT=verdana,arial,helvetica,sans-serif]"All investors in this fund should complain," said Collier, who is also a Standard Life shareholder. "If they don't respond to my complaint, I shall go to the Financial Services Ombudsman and the Financial Services Authority."

[/FONT] [FONT=verdana,arial,helvetica,sans-serif]An online comment from "sarah m" said her retiree father lost GBP37,000.

[/FONT] [FONT=verdana,arial,helvetica,sans-serif]Sarah said: "The paperwork he has from them (Standard Life) states that 'The Standard Life Pension Sterling One Fund is invested wholly in cash - the most stable investment.'"[/FONT]
[FONT=verdana,arial,helvetica,sans-serif]"If this is not a case of misselling, I don't know what is," she said.

[/FONT] [FONT=verdana,arial,helvetica,sans-serif]"He (the father) feels something has happened which seems to coincide with a change of fund manager in September 2007," she said. She did not reply to e-mail queries.

[/FONT] [FONT=verdana,arial,helvetica,sans-serif]Standard Life spokeswoman Nicola McGowan said: "It has been detailed in our customer literature that the fund was invested not only in deposits but also in a range of money market instruments."

[/FONT] [FONT=verdana,arial,helvetica,sans-serif]McGowan said information on the assets within the fund has been passed to its advisers.

[/FONT] [FONT=verdana,arial,helvetica,sans-serif]The fund's quarterly reports from end-2007 to September last year indicate that some of its cash investments "are not 'guaranteed' in the same way as high street bank or building society accounts are."

[/FONT] [FONT=verdana,arial,helvetica,sans-serif]"Therefore, in extreme circumstances, it is possible that the value of the fund may fall," the reports said.

[/FONT] [FONT=verdana,arial,helvetica,sans-serif]A spokesman said these reports are passed to both investors and advisers.

[/FONT] [FONT=verdana,arial,helvetica,sans-serif]So far, the company hasn't said whether it will compensate all investors in the fund. It said it will compensate those who have put in money between Dec. 23, the date when it saw the need to revalue the fund, and Jan. 13, the day before the fund was revalued.

[/FONT] [FONT=verdana,arial,helvetica,sans-serif]McGowan said: "The fund has no exposure to toxic or subprime mortgages from the U.S., and 93% of the assets are Triple-A rated and largely prime residential and we believe will generate good value in the long term."

[/FONT] [FONT=verdana,arial,helvetica,sans-serif]"Given the backdrop of the current economic turmoil, until recently the performance of the fund has been very stable," she said.

[/FONT] [FONT=verdana,arial,helvetica,sans-serif]U.K. Shareholders Association Communications Director Roger Lawson said: "I think it's a simple case of what's on the box not describing the contents properly."

[/FONT] [FONT=verdana,arial,helvetica,sans-serif]Lawson said the FSA may have failed "to adequately regulate what can be described as a cash fund."

[/FONT] [FONT=verdana,arial,helvetica,sans-serif]Lawson said the UKSA is open to helping affected investors, especially if they come in a group. "There are probably grounds for a complaint to the Ombudsman," he said.[/FONT]
[FONT=verdana,arial,helvetica,sans-serif]The FSA so far hasn't commented specifically on the Sterling fund case.

[/FONT] [FONT=verdana,arial,helvetica,sans-serif]"As a general point, we expect firms' marketing and disclosure material to outline key product features and any risks attached to a product or fund," FSA spokesman Adam Richards-Gray said Wednesday.
[/FONT][FONT=verdana,arial,helvetica,sans-serif][/FONT][/FONT][FONT=verdana,arial,helvetica,sans-serif]
[FONT=verdana,arial,helvetica,sans-serif]Company Web site: www.standardlife.com[/FONT][/FONT]
[FONT=verdana,arial,helvetica,sans-serif]-By Vladimir Guevarra, Dow Jones Newswires, Tel. +44 (0) 2078429486, [EMAIL="vladimir.guevarra@dowjones.com"]vladimir.guevarra@dowjones.com[/EMAIL]
[FONT=verdana,arial,helvetica,sans-serif]Click here to go to Dow Jones NewsPlus, a web front page of today's most important business and market news, analysis and commentary: http://www.djnewsplus.com/access/al?rnd=Nw7T8OkBFGQEawBq8mCLww%3D%3D. You can use this link on the day this article is published and the following day.[/FONT]
[FONT=verdana,arial,helvetica,sans-serif]([/FONT]
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[FONT=verdana,arial,helvetica,sans-serif]END) Dow Jones Newswires[/FONT]
[FONT=verdana,arial,helvetica,sans-serif]January 30, 2009 10:49 ET (15:49 GMT)[/FONT]

whiteflag_3

jameskerr wrote: »

I think we should all write to the FSA, power in numbers and all that, but also contact Money Marketing about it. I think there could definitely be some issues about the transparency on the literature. The reporter who ran the story is called Helen Pow and according to the website her email is [EMAIL="helen.pow@centaur.co.uk."]helen.pow@centaur.co.uk.[/EMAIL]

looks like Standard are up toi more under hand dealing this week


http://www.moneymarketing.co.uk/cgi-bin/item.cgi?id=180024&d=340&h=341&f=342

Seems they dont think theres a problem in directing enquiries to IFAs they have "chosen" themselves without making this clear to the unsuspecting public.

EdGasket

Hi, has anyone who invesyed in the Sterling Fund after 23rd December had a 'revaluation' yet? I have phoned Standard Life twice about this and was told I should hear by the end of January but of course I havn't. Neither did I get the original letter from them re the fall in Sterling fund and am concerned my account has been overlooked.
I transferred my pension to Standard Life on the 6th January; all of it into the Sterling Fund and was hit with the 5% drop in one day. I understand that for investors that moved into the Sterling fund after 23rd December (or who made contributions in this period) that some of this drop should be re-credited by the 'revaluation' which is spreading the 5% fall in one day over the period back to 23rd December 2008.

MikeJones_2

For information purposes. Articles in today's press:

- Standard lashed for holding back on Sterling fund rescue (Citywire)

- Standard Life urged to compensate all savers in 'toxic' cash fund (Telegraph.co.uk)


Mike

Kayster

Would it be best to transfer out of this fund into SL new cash fund or leave the money where it is?

Myrmidon_J

Kayster wrote: »

Would it be best to transfer out of this fund into SL new cash fund or leave the money where it is?

That depends.

As the high(er) risk nature of the fund has now been established beyond reasonable doubt, if you are close to retirement - and possible annuity purchase / payment of tax-free cash - then it would appear to make sense to reduce your exposure to the "toxic" assets in the Standard Life fund.

If you believe Standard Life when they say that they expect to redeem all the Asset-Backed FRNs at par, and you can commit to an investment timescale (5+ years), you might consider staying put. The fund has priced in a value below par - so when the instruments are redeemed at par, the fund should receive an uplift.

If, on the other hand, you fear that the non-conforming mortgages (i.e. sub-prime in all but name) behind some of the assets are likely to experience further falls in value, then there is every chance that the find will suffer another 'adjustment' - though this time, it ought to be phased over a realistic period.

My inclination is that the latter is the more likely. But you should make up your own mind - or consult a financial adviser!

Interestingly, Standard Life is now categorising adviser complaints into a vague "traffic light" system. I think this is most likely based on future profitability - i.e. who can they least afford to !!!! off? I'm sure they will cross-reference the list with an assessment of who is demanding the most redress.

Probably, it will be the smaller firms that conduct a larger percentage of their business with Standard Life - and have a lower-than-average percentage of client monies in the Sterling fund - that are the first (if any) to receive redress for their clients.

TCF! TCF! TCF!

Kayster

Myrmidon_J wrote: »

That depends.


TCF! TCF! TCF!

Transparent Conducting Film ? ?

Myrmidon_J

Kayster wrote: »

Transparent Conducting Film??

It might as well be, for all Standard Life knows about 'Treating Customers Fairly'!

MikeJones_2

Trustees of pension schemes that invested in the Standard Life Pension Sterling fund are taking legal advice according to this article:

- Standard Life victims take legal advice (Professional Pensions)


Mike

I work in the field of Pension Education and Pension Guidance in the UK. I am a member of the Specialist Pensions Forum as well as being a Voluntary Adviser for The Pensions Advisory Service. I work with scheme members, employers, trustees, scheme administrators and advisers on most things to do with employer sponsored pension schemes. The views expressed by me in this thread are my personal opinions. You should seek professional advice from an appropriately experienced and qualified adviser. I am not an IFA.