Scottish Mutual With Profits
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 includes this Scottish Mutual fund.
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 is that their performance is poor as is their future return prospects.
We believe we can safely rate the Scottish Mutual fund as very poor – overall its record and position is dire. Despite this there may be circumstances where a policyholder is still better off staying with them; this can be due to exceptional factors, for example having access to some form of guarantee. However if these exceptional factors do not apply then a transfer or surrender should be sought; to find something better.
The only way to make this decision is with all of the facts which will be dependent on the position and terms applying to your particular policy – our report service provides all the detail and information you will need.
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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
Scottish Mutual no longer exists as a stand-alone company, its 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.
Scottish Mutual With Profits Fund
The Phoenix Life Limited Scottish Mutual With Profits Fund consists of former Scottish Mutual Assurance Limited With Profits sub-fund policies.
The Estimated Total Value of this fund is a staggering £3.2 billion.
In their own words (from their annual report) “we generally declared nil annual bonus rates”.
£2 million was distributed in 2013 to shareholders under the 1/9th basis, suggesting bonuses declared in total of £20 million. Given the size of this fund it therefore suggests a bonus payment across the board of less than 1%......
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.