New Statesman Scotland
Standard Life continues to fight for its mutual status. Its tactic seems to be that its members will be too thick or too confused to see through its smokescreen of falsehoods.
Its mailshot to the 2.3 million Standard Life policyholders (its owners ) is shamelessly flawed in its arguments.
The board is blowing £10m in arguing that under its custody, the members can be assured, the venture is worth far less than the demutualisers claim. True, the valuation will depend on the market's sentiment at the time of the exercise, but why should it be lower?
Standard Life argues that average windfalls would be far more modest than Fred Woollard, the evangelist for conversion to plc status, has calculated. Standard Life might have had the integrity to use the same valuation methods as were used to assess its converting neighbour, Scottish Widows. Their shared actuarial methods (they share the same actuary - Tillingshurst ) would value it at above £16bn.
The golf-focused directors are simply underusing their capital. Letting money sleep is no virtue, least of all for a Scottish money house.
Standard Life says that mutuals consistently pay out more than limited companies. This is untrue. Beyond investment performance, where Standard Life is competent but not sparkling, you have to measure its expenses. The reduction in yields caused by fees (excessive staffing and too much sponsored jollification) does not reflect well on Standard Life.
The bluffers then say that pensions would pay out less if they were demutualised. Yes, possibly, by a slither. But are these pension-holders not the same people who would get the windfalls that would more than redeem these "losses"? That is to say, every member will be richer not poorer.
The romantic illusion nurtured by the board is that mutuals serve their members better than plcs. It is a warm and cosy idea. It would be pleasing if it were true. But it isn't. Are any Standard Life directors urging other companies of which they are directors to switch to mutual status. Of course not.
The case being put by Standard Life's board is shamefully inadequate. The board is failing in its first duty - to serve the interests of Standard Life members. The sheer weight of money being spent on propaganda may win the members of the board a stay of execution, but they should all resign. Stupidity is no excuse and, in the case of the mailing to their owners, it is more like cupidity.
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