Standard Life Sterling Fund – good news for investors - 2009-02-11



On 14th January, Standard Life announced and applied a reduction in the value of units in the Pension Sterling Fund by 4.8% to reflect a fall in the value of assets held within the fund. All clients who had money in the fund at this stage were written to by Standard Life and all of our own clients in the fund should have subsequently received a letter from ourselves, outlining our thoughts.

The good news for investors is that Standard Life have subsequently decided to reverse this decision and therefore investors who remain in the fund, as well as those who have subsequently come out of the fund, will see this 4.8% reduction reversed back into their policies. Sandy Crombie, the Standard Life Chief Executive explains this decision:

“After further consideration, we have decided to restore the value of the fund and put customers back to the position they would have been in had we not made this change. The reason we have taken this action is that having conducted our own review of the literature for the Pension Sterling Fund, and listened carefully to what customers and their advisers have been saying to us, it is clear that many people were not fully aware of the nature of the fund. Furthermore, some customers would not have anticipated that units in the fund could fall by such an amount in one day.”

“First of all, I would like to say sorry. With hindsight, some of the literature we provided in respect of this fund fell short of our own high standards.”

“Against this background, we feel strongly that the right thing to do is to put all our customers back to the position they would have been in had we not reduced the value of units on 14th January. This action reflects the importance we attach to the long-term relationships we have with our customers and their advisers.”

The change will be implemented on 12th February, and Standard Life will be writing to all customers who will benefit from this the following week, notifying them of what action has been taken.

We believe this is a good decision by Standard Life, and are pleased that our clients will benefit from this. In our letter previously sent to clients in the fund, we outlined our thoughts with regards to a switch from the Sterling fund into the Managed Cash fund. We would like to reassure those clients that have taken this action that they will also benefit from this announcement from Standard Life. We also believe that in the short-term, a switch into the Managed Cash fund continues to make sense for those investors looking for a higher level of short-term security from this part of their portfolio.

As ever, should you wish to discuss this, or any matter, please contact a member of the team on 01473 255948.

11th February 2009.