Friends Provident has become the latest life office to fall victim to internet carpet-bagging follow...
Friends Provident has become the latest life office to fall victim to internet carpet-bagging following recent attempts to force Scottish Provident and Standard Life to demutualise.
The Friends Provident campaign is being fronted by Gordon Hart, who spearheaded the Scottish Provident resolution, via the website www.fpvote.co.uk which is predicting windfalls of around £1,000 per member.
To call an Extraordinary General Meeting, the site needs to rally the support of 100 Friends Provident members and is calling on interested members to act immediately on the basis that "mutuality is not a flexible enough structure for a large financial services company in the 21st century."
Standard Life has also been forced to allow members to vote on the termination of its mutual status, despite rejecting an earlier requisition in February on a legal technicality.
The date for the Special General Meeting has not been set but has to take place within three months.
As with Scottish Provident, the Friends Provident campaign has been triggered by endowment performance.
The site said: "Many members are experiencing underperforming with-profits investments, especially endowments. A sizeable windfall will do much to address their shortfalls."
Brian Sweetland, secretary and director at Friends Provident, said the company has not had any contact with the group as yet, but added: "Our position is clear. We have a duty to act in the best interests of members. We are not wed immutably to mutuality and keep our status under review, but so far we have found mutuality to be the best way forward."
Meanwhile, Hart has been in discussions with Scottish Provident in his position as spokesman for the Scottish Provident Members Alliance Group (SPMAG). He met with David Woods, group managing director at the life office and, as a result, SPMAG has withdrawn its resolution to remove the directors from the board of Scottish Provident.
During the meeting Woods reminded Hart that the resolution was invalid, but confirmed that the company is undertaking a review of its options, which includes demutualisation.
Speaking on SPMAG's website, www.spmag.co.uk, Hart said: "The meeting with Woods was productive and informative. I now believe that the steps being taken by Scottish Provident are in the best interests of both the members and the employees of Scottish Provident."
"In the past, mutual companies have found it difficult to communicate with their owners - the policyholders - but the internet has changed all that. Websites are acting as a meeting point for members of mutuals, whatever their motivations."
Ned Cazalet, principal at Cazalet Financial Consulting, said that it was likely that both Friends Provident and Scottish Provident will have to change their status.
He said: "With its Self Assurance product, Scottish Provident is an attractive target for would-be buyers as they have a strong position in the market."
He said it would most likely merge with a life assurer with a gap in its portfolio or be bought by a bank. He added that Friends Provident was also likely to be bought or merge with a life office but for different reasons.
"Friends Provident is likely to react from a financial imperative and, as a mutual, its access to outside capital is limited."
