Scottish Friendly With Profits
RWP Research Findings, Overview and Comments
Scottish Friendly is a traditional mutual society; making it unusual in today’s With-Profits market-place where the majority of With Profits funds are now run by shareholder owned insurers.
The Scottish Mutual With Profits position is strong compared to most of the rest of the market. They are traditionally seen as one of the better companies in this sector. As a mutual society they retain some, if not most, of the traditional hallmarks of the with-profits concept.
A mutual society is one where its members effectively own the business.
Their current with-profits includes the rights and funds of previous mutual which they have now subsumed, for example Pioneer Friendly and Scottish Legal Life.
They generally have (comparatively) good With Profits performance, but this can vary depending on the type of policy and when it was taken out.
They also run both conventional and unitised With Profits policies; this distinction can be important as it can affect the guarantees and future prospects for policyholders to consider.
We assess Scottish Friendly as a company easy to deal with, providing a reasonable level of transparency. However in reviewing policies for With Profits investors we see a wide mix of past performance, depending on when a policy was taken out and what type of policy it is. Some past performance is poor; some is good. Some policies have compelling reasons to hold onto them, some are clearly risky with limited reward and offer policyholders limited value. On balance we feel many Scottish Friendly policies represent the better end of the market; avoiding some of the difficulties other providers have experienced.
However this should not breed complacency as with any company, your position will be dependent on a range of factors - you may be holding something solid or something flaky; we recommend if you hold a With Profits policy it should be fully reviewed on its own merits to judge how it is has performed and its future prospects.
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Company ownership position
Scottish Friendly Assurance Society Limited (SFAS) is the largest mutual life office in Scotland.
As a mutual, they don’t have shareholders, so all profits are used to benefit their customers.
Scottish Friendly looks after assets worth more than £1 Billion (as at 31/12/14) and has over 415,000 members. Their basic structure is as a mutual society, but underneath this banner they have two subsidiary companies:
Scottish Friendly Asset Management Limited markets OEIC, ISA and Junior ISA products.
Scottish Friendly Insurance Services Limited offers back office support services for financial services organisations.
Scottish Friendly were established in 1862 as the City of Glasgow Friendly Society. In 1992, following the transfer of business from a Scottish-based mutual, they adopted the name Scottish Friendly Assurance. On 1 June 2015 they took over the business of Marine and General Mutual. The takeover doubled Scottish Friendly’s assets to over £2 billion.
Scottish Friendly With Profits Funds
There is one With Profit fund in keeping with their mutual status; this fund sits behind a variety of different product types e.g. bonds, pensions or annuities and the terms applying – and therefore the return – are dependent on the product terms and which product a policyholder has. The actual management, performance and other features of the fund and the various product types can be found by using the links below or please contact us and we can help you get all the individual information on your policy.
For the latest with-profits bonus information please click here.
For information on how Scottish Friendly approach the management of their with-profits, including their current asset allocation mix and customer friendly documents on each product type please click here.
Please remember that any of our summary findings or conclusions are general; an appraisal of the general position for that company. There will be situations where an individual policyholder with a company that is ‘good’’ may want to look at surrendering or transferring their policy (for example to secure a guarantee or because it does not suit their risk position), likewise there will be situations where policyholders with a ‘poor’ company want to stick with what they have (for example because the penalty of exiting will be too great). Nothing can replace getting a report based on your unique circumstances; it is only this unique, personalised report which will provide the information that will instruct you on your circumstances regardless of the company and our general comments.