Just when you thought you knew who had your money

Sarah Pennells on how investors are getting confused by industry takeovers

In these days of a fiercely competitive financial services industry, consolidation seems to be the name of the game. Even the bigger players are not immune. Earlier this year, M&G investment manager was taken over by Prudential and Scottish Widows was bought by Lloyds TSB.

But where does it leave you if your investments change owner? And is there anything you should do about it? Phil Mutter, who lives in Croydon, has had a number of different companies running his policies and finds it increasingly difficult to keep track of them. Of his 15 policies, ranging from life assurance and personal equity plans (PEPs) to pensions, only two are with the original provider.

"At one stage it seemed that every time I received a letter about my policies, it had a different logo and letterhead on it," he says. "It isn't just that they've changed hands once, most have been through at least two changes of identity."

Most of Mr Mutter's policies are now owned by Windsor Life, even though they were originally taken out with four different names: Crown, Gresham, General Portfolio and GAN. Another policy, a PEP, started out under the GAN name, only to be taken over by Family Assurance, and his Crown pensions are now operated by Lincoln.

Suzanne Moore, of the Association of British Insurers, admits it can be confusing. She also says that there are likely to be an increasing number of takeovers and mergers. "We have seen a number of insurance providers merge or be taken over in the last few years. That trend is likely to continue and even speed up in the near future."

The ABI has produced a list of all life insurance providers and which firms have taken them over, designed to help anyone trying to find out more details about old policies.

It is important to remember that a new company need not mean bad news, says Graham Bates, of Bates Investment Services. "A fund may be strengthened by the merger if it's linking up with a stronger one, although it's not always the case."

He would recommend anyone in Mr Mutter's position to review investments regularly. "Looking at the funds he now has invested with Lincoln - it has generally underperformed compared with its sector averages over periods of one, three, five and 10 years." One fund, the Global unit trust, has underperformed in all four time frames. "This fund has even managed to fall in value by 3 per cent over a three-year term, when the average fund grew by 33 per cent," Mr Bates says.

Anne McMeehan, of Autif, the unit trust body, says that there are no hard and fast rules but investors should look at their options. "If you are happy with your policy's performance, you need to ask yourself if there will be much change to the way your investments will be managed," she says. "Sometimes the fund manager won't change - in effect, it will be the same fund."

If there is a change and you are not happy with it, you may be able to vote against it, says Ms McMeehan. "If the fund you're investing in is about to be absorbed into another bigger fund, you will be asked for your views. However, that isn't the case if your money is with the bigger player."

She also believes that with 1,800 unit trust funds in existence at the moment, many more will merge or take over others and in some cases it may be better to get out than stay. "If the new company or fund cannot put up a persuasive argument for you to leave your money with it, you should bite the bullet and move your money elsewhere," she says.

While many of us are getting used to the idea of taking a more hands- on approach with money we have specifically earmarked as an "investment", we are less likely to do that with our pension funds, says Tim Johnson, of independent financial advisers BMS Millsmith. "It's not the best idea to move your pension money around at the drop of a hat, but they are supposed to be flexible," he says. "That means if it could do better elsewhere, a move may be your best option."

Before you do switch your money, you should check the penalties for moving it and see how they compare with the potential benefits.

Useful contacts: ABI, 51 Gresham Street, London. EC2V 7HQ. Bates Investment Services, 0800 068 8655, BMS Millsmith, 0171 242 7968.


Find out whether the fund you have invested in is going to have different fund managers.

Ask if the charges will rise and whether the fund will still have the same investment objectives.

If your investments are getting new management, find out about its track record for the type of policy you have.

If you have a pension ask for a "transfer value". This will tell you how much money you have available to switch to another provider and takes into account penalty charges. The transfer value won't be able to tell you whether you'll be better off moving your money elsewhere, but an independent financial adviser will.

If you have an old policy and you are trying to track down the current providers, you can contact the ABI for its list of insurers.

Start your day with The Independent, sign up for daily news emails
ebooksA celebration of British elections
  • Get to the point
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

SThree: Trainee Recruitment Consultant - Swiss Banking and Finance

£20000 - £25000 per annum + Uncapped commission: SThree: Can you speak German,...

Ashdown Group: Marketing Executive - 6 month FTC - Central London

£25000 - £30000 per annum + benefits: Ashdown Group: An exciting opportunity f...

Ashdown Group: Junior Project Manager (website, web application) - Agile

£215 per day: Ashdown Group: Junior Project Manager (website, web application ...

Guru Careers: Software Engineer / Software Developer

£40-50K: Guru Careers: We are seeking an experienced Software Engineer / Softw...

Day In a Page

General Election 2015: Ed Miliband's unlikely journey from hapless geek to heart-throb

Miliband's unlikely journey from hapless geek to heart-throb

He was meant to be Labour's biggest handicap - but has become almost an asset
Amr Darrag: Ex-Muslim Brotherhood minister in exile still believes Egypt's military regime can be replaced with 'moderate' Islamic rule

'This is the battle of young Egypt for the future of our country'

Ex-Muslim Brotherhood minister Amr Darrag still believes the opposition can rid Egypt of its military regime and replace it with 'moderate' Islamic rule, he tells Robert Fisk
Why patients must rely less on doctors: Improving our own health is the 'blockbuster drug of the century'

Why patients must rely less on doctors

Improving our own health is the 'blockbuster drug of the century'
Sarah Lucas is the perfect artist to represent Britain at the Venice Biennale

Flesh in Venice

Sarah Lucas has filled the British pavilion at the Venice Biennale with slinky cats and casts of her female friends' private parts. It makes you proud to be a woman, says Karen Wright
11 best anti-ageing day creams

11 best anti-ageing day creams

Slow down the ageing process with one of these high-performance, hardworking anti-agers
Fishing for votes with Nigel Farage: The Ukip leader shows how he can work an audience as he casts his line to the disaffected of Grimsby

Fishing is on Nigel Farage's mind

Ukip leader casts a line to the disaffected
Who is bombing whom in the Middle East? It's amazing they don't all hit each other

Who is bombing whom in the Middle East?

Robert Fisk untangles the countries and factions
China's influence on fashion: At the top of the game both creatively and commercially

China's influence on fashion

At the top of the game both creatively and commercially
Lord O’Donnell: Former cabinet secretary on the election and life away from the levers of power

The man known as GOD has a reputation for getting the job done

Lord O'Donnell's three principles of rule
Rainbow shades: It's all bright on the night

Rainbow shades

It's all bright on the night
'It was first time I had ever tasted chocolate. I kept a piece, and when Amsterdam was liberated, I gave it to the first Allied soldier I saw'

Bread from heaven

Dutch survivors thank RAF for World War II drop that saved millions
Britain will be 'run for the wealthy and powerful' if Tories retain power - Labour

How 'the Axe' helped Labour

UK will be 'run for the wealthy and powerful' if Tories retain power
Rare and exclusive video shows the horrific price paid by activists for challenging the rule of jihadist extremists in Syria

The price to be paid for challenging the rule of extremists

A revolution now 'consuming its own children'
Welcome to the world of Megagames

Welcome to the world of Megagames

300 players take part in Watch the Skies! board game in London
'Nymphomaniac' actress reveals what it was really like to star in one of the most explicit films ever

Charlotte Gainsbourg on 'Nymphomaniac'

Starring in one of the most explicit films ever