Carpetbaggers can still cash in

Michael Drewett offers some tips to those waiting for a windfall

The headlong rush to open building society accounts for "carpetbagging" has largely fizzled out as the most likely targets for windfalls seem to have declared their hand one way or another. According to Adrian Coles, director general of the Building Societies Association, most of the best offers have gone. Mr Coles says: "All the big players that might have considered changing direction have already done so. Others in the same league of size that want to remain mutual have made their positions clear too. Mostly, they have promised `loyalty bonuses' to their members to confirm their stand on mutuality."

Carpetbagging is the term coined for opening an account with a given society in the hope of it being taken over, merging or converting to a bank. The incentive is the prospect of a cash or share windfall should it do so. Such opportunists are criticised for their "greed"; neither are they seen as the long-term customers a society would like.

Dr Calum MacLeod, the chairman of Britannia Building Society, said recently: "The pro-conversion campaigners' message is clear. Give us the money and we'll run. What these people ignore is that reserves have been built up by generations to support our members and activities in the future. No one has the right to buy those reserves."

But while diehard mutual building societies might be expected to make such statements, it is difficult to blame anyone for taking advantage of a one-way opportunity to make a profit. Unlike a bet at the bookies, carpetbaggers still have their stake at the end of the game. None the less, the opportunities are running out. A few of the smaller societies, such as Birmingham Midshires, may still be regarded by some as worthy of a gamble, especially as they have been quiet about providing enhanced members' benefits - usually a strong clue of a commitment to mutuality. True, rumours continue to question the ability of Woolwich to repel boarders while institutions such as Prudential sniff around. Any takeover would almost certainly generate a bigger handout.

But in the meantime the days of putting pounds 100 in a variety of accounts to have a punt are over. Even among the staunchly pro-mutual societies, minimum opening deposits have in most cases been raised, the excuse being "the obstacle to providing a good service to the ordinary investor caused by queues of speculators".

But if these opportunities have all but gone, there may still be ways to increase the bonus for those who did invest in time but whose societies have not yet published their final plans. Some converting societies will distribute benefits to all members equally, while others may vary payouts according to how much is invested by an individual. Alliance & Leicester, for example, has said that full details of its conversion will only be made clear by the end of the year. The bet is it will go for the tiered approach, awarding more benefits to those with more on deposit on the striking date. Should this be so, the next qualifying level up is tipped to be around the pounds 500 mark. Predictably the society remains tight-lipped about its plans. But anyone with an interpretive mind might be interested in the veiled comment that: "If you have additional money deposited elsewhere, it probably would not do you any harm to move it across."