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  • FIRST POST
    minsky
    Standard Life Sterling Fund
    • #1
    • 15th Jan 09, 12:48 PM
    Standard Life Sterling Fund 15th Jan 09 at 12:48 PM
    Has anyone else been affected by the Standard Life Sterling fund? Last year I had getting on for £100K in equity funds, had a bad feeling about the stock market so switched to a safer fund. Standard Life told me the safest, lowest risk one they offered was the Sterling fund - next to no growth but next to no risk. A safe haven to weather the storm and retain capital.
    It began to fall towards the end of last year and yesterday it fell another 5% in one day. And its supposed to be cash, like a deposit account. I've lost over 10 grand. 10 grand of missed holidays, clothes and meals out whilst I saved and 10 grand less for retirement. Meanwhile the fund manager gets a six figure salary and god knows what bonus.

    Is there any way I can get my money back?
    Mis-selling? Negligence?
    Last edited by minsky; 29-01-2009 at 12:12 AM.
Page 1
    • dunstonh
    • By dunstonh 15th Jan 09, 1:09 PM
    • 96,944 Posts
    • 64,913 Thanks
    dunstonh
    • #2
    • 15th Jan 09, 1:09 PM
    • #2
    • 15th Jan 09, 1:09 PM
    And its supposed to be cash, like a deposit account
    No its not.

    I've lost over 10 grand. 10 grand of missed holidays, clothes and meals out whilst I saved and 10 grand less for retirement. Meanwhile the fund manager gets a six figure salary and god knows what bonus.
    No sure what your point is there? You are not in a risk free fund and it doesnt offer capital guarantees. It is a low risk fund but not a no risk fund.

    Is there any way I can get my money back?
    No.

    Mis-selling?
    Did you receive a recommendation from an IFA telling you to do this and did that adviser tell you that the capital was guaranteed? If so, then you have potential for mis-sale. If you did it off your own back then you should complain to yourself.

    Negligence?
    almost certainly something didnt go as planned but its unlikely that it would be classed as negligence as they dont offer any guarantees.
    I am an Independent Financial Adviser (IFA). Comments are for discussion purposes only. They are not financial advice. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.
    • purch
    • By purch 15th Jan 09, 1:19 PM
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    purch
    • #3
    • 15th Jan 09, 1:19 PM
    • #3
    • 15th Jan 09, 1:19 PM
    yesterday it fell another 5% in one day
    Who/What defaulted ??

    Cannot think of any reason for a huge sudden drop in a Money Market Fund unless one of it's securities went t*ts up !!!!
    'In nature, there are neither rewards nor punishments - there are Consequences.'
  • minsky
    • #4
    • 15th Jan 09, 1:22 PM
    • #4
    • 15th Jan 09, 1:22 PM
    Hi Dunston - the points I was making are:
    I have a strong sense of injustice about this - it is not my "fault" for being reckless with the money and its not an "act of god" for which no-one is responsible. In my opinion Standard Life mismanaged the money I entrusted to them.
    If this is the lowest risk fund Standard Life could offer me - heaven help anyone else who has a pension. (I have since switched what remains of my money into their managed Cash fund as a temporary measure while I figure out what to do. SL say they cannot guarantee not to lose the money in that fund either).
    Its also a warning to others - even investing in the lowest risk pension means you may lose a big chunk of the hard-earned money you put in.
  • EdInvestor
    • #5
    • 15th Jan 09, 2:42 PM
    • #5
    • 15th Jan 09, 2:42 PM
    Who/What defaulted ??

    Cannot think of any reason for a huge sudden drop in a Money Market Fund unless one of it's securities went t*ts up !!!!
    Originally posted by purch

    It was revalued on the basis of the worth of the "asset based securities" within.Those American subprime mortgages do get into some very unfortunate places.
  • EdInvestor
    • #6
    • 15th Jan 09, 2:44 PM
    • #6
    • 15th Jan 09, 2:44 PM
    Its also a warning to others - even investing in the lowest risk pension means you may lose a big chunk of the hard-earned money you put in.
    Originally posted by minsky

    If you move to a SIPP you can invest cash in an actual bank account with the usual safeguards. But an ordinary pension will not usually offer this.
    • purch
    • By purch 15th Jan 09, 2:57 PM
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    purch
    • #7
    • 15th Jan 09, 2:57 PM
    • #7
    • 15th Jan 09, 2:57 PM
    According to Standard Life:

    "Due to the exceptional market conditions in recent months, there has been limited trading in asset backed securities and this has led to a general downturn in the current market values of these assets. The asset backed securities we hold in the Pension Sterling Fund are high quality assets that we aim to hold to maturity, when we expect them to return their higher ‘par’ value. However, in order to be fair to customers who wish to leave the fund and to those who wish to stay, the value of the current unit price must reflect the presently reduced market values."

    The Fund is supposed only to hold short maturity paper, 3 years or so. They seem hopeful that the paper will be redeemed at maturity, so this close to 5% drop is only a mark to market loss.

    Sounds pretty steep for such short dated paper.
    'In nature, there are neither rewards nor punishments - there are Consequences.'
    • dunstonh
    • By dunstonh 15th Jan 09, 3:07 PM
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    dunstonh
    • #8
    • 15th Jan 09, 3:07 PM
    • #8
    • 15th Jan 09, 3:07 PM
    I have a strong sense of injustice about this - it is not my "fault" for being reckless with the money and its not an "act of god" for which no-one is responsible. In my opinion Standard Life mismanaged the money I entrusted to them.
    They certainly haven't done at all well but its not grounds for mis-sale. Mis-sale is when you are advised to do something that is not right for you. From your comments, it sounds like you made the choice to invest in that fund. So, the liability of the decision making lies with you.

    If this is the lowest risk fund Standard Life could offer me - heaven help anyone else who has a pension. (I have since switched what remains of my money into their managed Cash fund as a temporary measure while I figure out what to do. SL say they cannot guarantee not to lose the money in that fund either).
    You are mistaking what a cash fund is. It is not a deposit account. It can lose money. Theoretically the losses should be rare and small but its not risk free.

    Its also a warning to others - even investing in the lowest risk pension means you may lose a big chunk of the hard-earned money you put in.
    Not true. Your problem is that you went in the lowest risk option that your provider and plan offered. However, its not the lowest risk option available. I am no fan of Standard Life and what has happened is just another reason why I haven't used them for the last 5 years but it appears that part of the problem here is your lack of understanding.

    As Ed says above, if you want cash as in savings account then you need to have a SIPP or a high quality personal pension (Standard Life dont offer a quality SIPP and dont have a high quality personal pension).
    I am an Independent Financial Adviser (IFA). Comments are for discussion purposes only. They are not financial advice. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.
    • cogito
    • By cogito 15th Jan 09, 5:30 PM
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    cogito
    • #9
    • 15th Jan 09, 5:30 PM
    • #9
    • 15th Jan 09, 5:30 PM
    'It is primarily designed for investors who are looking for a temporary home for their money when the short-term outlook for equities,fixed interest securities and property is uncertain.'

    I have a small amount in this fund as I have been putting recent contributions into it until I came to a view about the direction of the markets. It is effectively represented as an equivalent to cash when clearly, now, it is not.

    I am accustomed to the value of my funds fluctuating by hundreds or even thousands of pounds in a day and do not have a particular problem with this. However, nothing has hacked me off more that suffering the loss of a mere £130 in this 'safe' fund and I have made Standard Life aware of my feelings. I entirely agree with the OP re this fund.

    If there is one consolation, the revaluation is backdated to December 23rd so my January contribution will be recalculated and used to purchase more units. Meanwhile, I am considering putting future contributions nto the SL Timbuktu Special Situations Fund as it would appear to carry less risk than the Sterling fund.
    • EdGasket
    • By EdGasket 15th Jan 09, 5:56 PM
    • 3,456 Posts
    • 1,446 Thanks
    EdGasket
    cogito: where did you hear that Standard Life was backdating the revaluation of their sterling fund to 23rd December? I have been hit by quite a big loss but wasn't in it until 6th January.
    I switched my pension into Standard Life and selected the Sterling fund initially until the money was transferred. Now I have suffered a fairly hefty loss due to the fall in this fund. My money was transferred in around 6th January. How will I get more units, today's valuation is only showing a big loss ?
    • cogito
    • By cogito 15th Jan 09, 6:03 PM
    • 4,010 Posts
    • 11,609 Thanks
    cogito
    I spoke to them this afternoon and that is what they told me. They said it would take a little time to sort out but it doesn't sound as if you've got anything to worry about.
    • EdGasket
    • By EdGasket 15th Jan 09, 6:10 PM
    • 3,456 Posts
    • 1,446 Thanks
    EdGasket
    OK thanks, I may also talk to them myself. I've now read the reports on CityWire and FT websites but neither mention any backdating or any sort of compensation. Is it worth getting out now or is that all the bad news out of the way for this fund?
    • cogito
    • By cogito 15th Jan 09, 6:21 PM
    • 4,010 Posts
    • 11,609 Thanks
    cogito
    I don't like funds that lack transparency or where I don't understand the risks. In this case I thought the fund was OK as a short term refuge. The implication in the SL factsheet from which I quoted is that your money is safe when it obviously isn't. I did not go into the fund expecting gains and did so simply to avoid losses.

    As for getting out, I think that I would want to know exactly how much my fund is worth before switching out.
  • mad
    I have lost over 2k here and must admit thought it was relatively safe if 'lackluster' fund i.e.graded 1 on their 7 point scale stable to god knows what.....(!!!! your money up the wall or something) Having said that I take all Dunsthon / Eds points as I am sure they are right. I will take up with my financial adviser but am also going to have a go at SL anyway for my own amusement.

    finally for whatever reason any of us where in this fund it's still very annoying wether we made mistakes or not and I tyhink we have a right to be !!!!ed off about it...........

    Feeling better already
  • MikeJones
    Hi minsky,

    Standard Life told me the safest, lowest risk one they offered was the Sterling fund - next to no growth but next to no risk. A safe haven to weather the storm and retain capital.
    Originally posted by minsky
    Mind if I enquire how Standard Life communicated this to you and what literature, (printed/website etc), did you receive/see prior to making your decision to switch fund?

    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.
  • mad
    Have looked up some of my documents now and:

    the Standard Life Pension Sterling One Fund is classed as Assett class: cash

    The description given is:

    '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 or bonds, but has less potential for growth'

    Now I am sure as others have pointed out there is risk but the literature I have does not make that clear at all. Is there any case here for being misled?
    • dunstonh
    • By dunstonh 15th Jan 09, 9:31 PM
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    dunstonh
    My Scottish Life rep phoned me this afternoon. He knows that Standard Life are one of my pet hate companies and he was having a laugh at this latest "event".

    He did remark that the comments he had heard was that Std Life did have some marketing literature that may have misrepresented the risk level. I tend not to use providers own stuff as its unreliable, plus I dont use SL so i cant recall what the literature said. However, you may wish to dig a copy out if you still have it as you may have grounds for complaint under misrepresentation.

    Whilst you did not seek advice, you did act on their material and if the information was wrong or misleading then you could argue on that point.

    This doesnt change my view earlier though that the fund is the same as a savings account. It perhaps just highlights that relying on providers documentation is not a good idea.
    I am an Independent Financial Adviser (IFA). Comments are for discussion purposes only. They are not financial advice. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.
  • bleaky
    Bloody idiots. I lost a bit, but luckily I had distributed my funds ( which are just days away from being transferred into an H-L SIPP where I can take care of my own money) into multiple cash holding options - I only had 5K in the sterling fund thank god.

    In this environment the only safe thing is to look after your own cash, as long as you have at least a modicum of understanding of what you are doing. A SIPP is great for that.

    The money managers now have no more idea what is going to happen to the market than you or I do. For anyone wanting a good independant view of what is going on out there, this is by far the best place to learn:

    http://globaleconomicanalysis.blogspot.com/

    There is enough great analysis online that you don't need to rely on worthless financial advice any more.

    Good luck.
    • Rhymsta
    • By Rhymsta 15th Jan 09, 11:29 PM
    • 474 Posts
    • 212 Thanks
    Rhymsta
    I also got the bad news letter today... shocked is not the word! I had £50,000 in my SIPP - 25k I transferred into equity funds a few months back and was going to drip feed the rest over. In all the conversations I have had with my adviser the fund has always been referred to as a cash fund. I wasn't even expecting it to grow - but I certainly wasn't expecting a 5% fall!
    I am very disappointed with my Standard life SIPP. I have asked them 4 times now for a transaction statement and recieved nothing. I also found out - too late that managing my own funds isn't as easy as just switching on-line - it takes them up to 4 days to act on the instruction - not great if you want to switch straight after a big dip.
  • artha
    Has anyone else been affected by the Standard Life Sterling fund? Last year I had getting on for £100K in equity funds, had a bad feeling about the stock market so switched to a safer fund. Standard Life told me the safest, lowest risk one they offered was the Sterling fund - next to no growth but next to no risk. A safe haven to weather the storm and retain capital.
    A year later it had fallen 8% and yesterday it fell another 5% in one day. And its supposed to be cash, like a deposit account. I've lost over 10 grand. 10 grand of missed holidays, clothes and meals out whilst I saved and 10 grand less for retirement. Meanwhile the fund manager gets a six figure salary and god knows what bonus.

    Is there any way I can get my money back?
    Mis-selling? Negligence?
    Originally posted by minsky
    Given this information do those who have their finger on the pulse expect this to be a one off adjustment or could ther be further shocks for investors in this "allegedly"safe haven for short term investement. At the end of this month I have signed up to start putting most of my salary into this fund (company AVC scheme) for the 5 months prior to my retirement with the intention of taking it as tax free cash
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