RWP Research Findings, Overview and Comments

In considering any company and its with-profits RYWP will look to assess a range of factors which will include: the company’s management record; its transparency of information, its financial strength; its prospects for providing future returns and the nature of its with-profits approach.

In this regard we believe that Phoenix run some of the poorest with-profits funds in the UK today. This does NOT include this Royal & Sun Alliance With Profits fund (see below).

In many respects although their funds are called with-profits, they are run in a similar way to a traditional managed fund. They have lost contact with the basic ethos which originally stood behind the with-profits concept and made it a popular and successful investment. Policyholders are now in funds which more often than not will have poor performance and very limited future prospects.

Overall our view of Phoenix With Profits is that their performance is generally poor as is their future return prospects.

 

However this particular fund does appear to be better than the majority with Phoenix; its record is average and is not the basket case like many of the other Phoenix With Profits funds. As with all with-profits, general statements of performance and prospects are useful but only to a point. Some policyholders may benefit from remaining with the fund, some may be better exiting, this can only be determined on an individual case basis. The Royal & Sun Alliance position is likely to vary from policy to policy – some will be better than others depending on when a plan was started, the type of plan and the Terms & Conditions on the individual policy. A true assessment of value can only be made against an individual policy.

 

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For our specific report on Phoenix Life which will give you all the information you need to judge their funds please click here

 

 

Company ownership position

Royal and Sun Alliance with profits is now housed as a closed fund under Phoenix Life.

Phoenix Life and Phoenix Life Assurance Limited are part of Phoenix Group Holdings, a FTSE 250 Company. They operate 13 with-profits funds (10 under the Phoenix Life banner, 3 under the Phoenix Assurance Limited banner) which are all closed to new business. They also operate two non-profit funds. Phoenix is the UK’s largest specialist consolidator of closed life funds. Their funds were all closed to new business by their previous owners, in many cases after experiencing difficulties.

 

Phoenix Life Limited Phoenix With-Profits Fund

This Phoenix With-Profits Fund traces its history back to Royal Life Insurance Limited (RLI). RLI was a company within the Royal Insurance Group, which merged with the Sun Alliance and London Insurance Group in 1996. In 1998, RLI was renamed Royal & Sun Alliance Life and Pensions (RSALP). If you were previously in a Royal & Sun Alliance with-profits fund this is where it will now be held (and managed).

The estimated total value of this fund is £5.7 billion.

In 2013 Annual bonus rates varied within this fund from 0.10% to 3.25%.

The shareholders' share of distributed profits for 2013 from this fund was £20.9m. This is based on a calculation of 1/9^th of traditional with-profits and 5/95^th for unitised with-profits. This suggests that distributed profits for policyholders in total was somewhere from £250-£300 million; approximately 5% of the overall fund size.

 

 

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.

Click here to get request more detail from us about Royal & Sun Alliance

Please note the information on these pages should not be used in any way or form as the basis for any decision about your with-profits investment or plan. RWP makes every attempt to ensure that all information is up to date and accurate but RWP cannot be held responsible for any of the detail provided. The information above is published to act as a broad guide to the Company’s position, history and future prospects. However any decision about your own with-profit plan should only be taken after you have sought and received qualified advice from an appropriate regulated advisory source and should be based entirely on that advice.