Standard Life (Thieves!)

Bitstring , from the wonderful person hew_dunnit said

It's called a Market Value Adjustment, or MVA, and if it isn't spelled out in the documentation fine print, and/or if your IFA didn't make you aware of it, then you may have a claim. Else-wise, tough .. always read the small print.

A Market Value Adjustment! What does that actually mean?

"If your investment makes a profit despite market conditions we'll steal it."

I suspect it's to boost SL Management's own bonusses, pensions, salaries etc.

An MVA is meant to be a compromise between the investors who cash in early and those who remain.

If we theorise and say that you and Mr X are the only two investors in a withprofits fund and the values of the two policies have been given as 50K each, then the stockmarket goes down. If Mr X decides to encash his policy at a time when the underlying funds are, say 80K, if he gets the 50K value then your piece of the underlying fund will only be 30K. Is that fair? This is what a Market Value Adjuster does, to try to make it fair to those *who are left*.

Rob Graham

And vice versa, if after Mr X withdraws his money and makes a loss from the underlying funds, but then the fund recovers and I make a profit. Should I then send him some of this in the interests of fairness?

It's bollox and you know it.

Bitstring , from the wonderful person hew_dunnit said

The profit you make after he takes his money out is all being made with your money, isn't it, so it's =all= your profit. He can't make a profit (in the fund) on money that he has removed and now has under his mattress. If he'd left his money in, the fund would have made 2x the profit, and half of it would have indeed been his.

Nope, it's how insurance funds work. If you don't understand that, leave your money in the bank. You'll find similar (but different) adjustments being made on unit trust prices too, in the event you want to sell up when the market is falling like a rock.

The MVA is supposed to encourage you to stay in the fund until a) it =has= made a profit or b) you reach one of the guaranteed anniversary dates (usually 5, 10 or 20 years) at which point they allow you to withdraw your money with no MVA.

As one who has criticised SL frequently, on the basis that they have paid themselves fabulous salaries and pensions while destroying value for their members, may I just add

"They are always right because they say so"

The simple possibility of quoting a price which is the actual value they will deal in their funds is not within their understanding.

In message , Michael Mause writes

Yes it is.

They have loads of unitised funds which work exactly as you wish.

Bitstring , from the wonderful person john boyle said

Downside being that they don't guarantee you can cash them in with no loss (or a 4%/year gain, or whatever the current guarantee on the life fund is) on their 10th anniversary. 8>.

In message , GSV Three Minds in a Can writes

Eh?

Bitstring , from the wonderful person john boyle said

I'm not sure how to interpret the 'Eh?'. Does that mean that you think they do guarantee the value of their unitised funds at 10th anniversary (or whenever), or that you don't think there is a guarantee on the value of the 'with profits' fund at 10 year anniversary??

In message , GSV Three Minds in a Can writes

I think that neither of your statements apply to the current standard life with profits fund which is what the poster was referring to, there is no guaranteed growth rate of any amount and no guarantee at the 10th anniversary.

Bitstring , from the wonderful person john boyle said

Not even a guarantee that you can cash in without an MVA on certain dates? I must admit, I've not looked at the SL offering for quite a while, but I can't see much point in a 'with profits fund' ('smoothed growth, protection from the ups & downs of the stockmarket') if there is no guaranteed annual bonus rate, and no exit points where there is guaranteed to be no MVA.

In message , GSV Three Minds in a Can writes

Nope.

Its only been going a few years (as a single premium bond) and has never had any of those features.

Very few w/p funds have either these days.

Bitstring , from the wonderful person john boyle said

Guess I'll hang on to my Liverpool Victoria WP bond then, which has both.

In message , GSV Three Minds in a Can writes

Yes, I would.

In my youth a guy from LivVic called on my g/parents and parents for a few farthings a week. Over the decades their w/p fund has been fantastic.

Now they have been taken over/amalgamated with somebody or other and arent based in Liverpool. Their published ratios make them appear better than some at the moment, by comparison, but I wonder how it will all work out for them in the end.