Standard Life - 73p Cash Payment But .......

HarryS

Thanks very much bowlhead99, super fast and super simple!

It is a bit strange but I never actually received a letter (it may still arrive I guess)

Thanks again

Lambie123

Thank you for your detailed reply bowlhead99. Sorry for the "Chinese whispers," as I said I don't have a clue about shares and I was just trying to help my dad as best as I could from my understanding of his explanation (which doesn't always come across well.) I feel I have done that though thanks to you. He's looked over everything and with the information from you he has decided to go with the C option.

Thrugelmir

molerat wrote: »

No because the declared 11.43p dividend is based on the earnings of and attributed to the old number of shares but will be paid per share on the new number so, as killerkev poses, it should in fact be 13.97p per new share. Future dividends will obviously be based on the new shares but the 2014 final is not according to the literature.

If SL have sold an operating division that generated a profit that contributed to the overall group position. Then future dividends could potentially decrease if the remainder of the group fails to make up the shortfall.

EB2015

So, just to change the 'tack' of this thread a little,

if SL has 'made' £x of money from the Canadian sale (and didn't know what to do with it), could they not have used this surplus to improve the final endowment payments of those 'members/investors' who have endowments that are projected to miss (dramatically) the original forecast?....This is a serious question by the way.

Linton

EB2015 wrote: »

So, just to change the 'tack' of this thread a little,

if SL has 'made' £x of money from the Canadian sale (and didn't know what to do with it), could they not have used this surplus to improve the final endowment payments of those 'members/investors' who have endowments that are projected to miss (dramatically) the original forecast?....This is a serious question by the way.

SL is owned by its shareholders. If SL sells part of its business and doesnt need the money to invest to the benefit of the company then the proceeds belong to the shareholders.

bowlhead99

Linton wrote: »

SL is owned by its shareholders. If SL sells part of its business and doesnt need the money to invest to the benefit of the company then the proceeds belong to the shareholders.

Agreed with that.

SL stopped being a mutual in 2006. At the time, there were over 2 million people that had an entitlement to cash or SL shares. How much cash you got, or how many shares in the SL business, was dealt with at the time and is done and dusted. Some people cashed out, some people became owners of the company.

Today they are a business owned by 1m+ shareholders from little old ladies to huge corporate or public pension funds. The business exists to make money for those shareholders. They have several divisions selling different products in different locations. The income they get from selling the products will create cash available to pay the expenses of the business, to reinvest and grow the business, and to pay dividends to the owners of the business.

If they decide to dispose of one big part of the business for fat cash, then after they've put aside money for expense and to grow the remaining business, the owners of the business get that fat cash, either as an extra dividend, or a capital return, as is happening now.

Whether or not a product that you buy from them has good, bad, or indifferent financial performance, does not mean you become entitled to take their day to day operating profits or big one-off profits or capital returns on disposals. All that money belongs to the owners of the business, not to you as a customer. What you get as a customer is related to what you invested into, and its performance. You only get access to the returns of SL (the whole company) if you are an owner of SL (the whole company).

If you simply own a product, and don't own shares in the company, then the returns of that product are distinct from how well the company itself might have done. It's like if you have a savings account at Marks and Spencer or Tesco, you get the usual returns from that account, rather than the returns that the shareholders of the company make from banking activities and selling bread.

EB2015

Thanks for your reply, but surely the Canadian assets were originally bought with profit made from both shareholders capital AND endowment holders capital?


The fact that SL 'messed up' with their projections (misselling?) has meant that many endowment holders have shortfalls. Does SL not have an (moral?) obligation to increase/make recompense to endowment holders (to reduce the shortfall) whilst they also take their fees and pay dividends to shareholders?...It appears that when SL performed badly the endowment holder got financially 'hit' yet when SL perform well only SL and its shareholders benefit?


Bit 'one-sided' wouldn't you say?

Old_Slaphead

Weren't endowment policyholders given 'free' shares in the demutualisation ?

bowlhead99

Old_Slaphead wrote: »

Weren't endowment policyholders given 'free' shares in the demutualisation ?

Exactly, qualifying members got a payout which according to the press averaged out to a few thousand of value but for some it could have been tens of thousands or more, and others rather less.


(the daily mail is not the most reliable publication but it was one of the first hits on google: http://www.thisismoney.co.uk/money/investing/article-2790828/hunt-standard-life-policyholders-owed-113m-unclaimed-assets-including-one-line-120-000-windfall.html)

If you were given share ownership then, you may still have that now, and will have benefited from dividends over time, plus the cash being paid out now. If you chose to cash in the shares rather than waiting for growth in value of the business, then you won't still have them so you won't get paid anything now.

Linton

EB2015 wrote: »

Thanks for your reply, but surely the Canadian assets were originally bought with profit made from both shareholders capital AND endowment holders capital?


The fact that SL 'messed up' with their projections (misselling?) has meant that many endowment holders have shortfalls. Does SL not have an (moral?) obligation to increase/make recompense to endowment holders (to reduce the shortfall) whilst they also take their fees and pay dividends to shareholders?...It appears that when SL performed badly the endowment holder got financially 'hit' yet when SL perform well only SL and its shareholders benefit?

SL didnt (probably) mess-up with their projections - the projections would have been mathematically based on assumptions of investment return that looked reasonable at the time. Since then the world has changed in ways that invalidated the assumptions. I dont know of any evidence that SL performed worse than anyone else. That is the risk that one takes with investing - returns arent guaranteed. The basic problem with endowments was that the customers didnt understand what they were buying.