STANDARD Life is normally so august and smooth that no hint of tribulation ever breaks the surface.
Yet today we learn that the vast mutual may start to impose penalties if policy-holders try to surrender their contracts. Cashing in an insurance
policy is always an act of acute foolishness or desperation but Standard Life’s position has previously been that policies are the property of the person insured rather than the mutual fund’s. This marked them out as more self-confident than their rival insurers.
It seems that low stock market prices are tempting people to cash in ever more policies. This is the opposite of their self-interest but there are rarely few things more irrational than people making money decisions. Standard Life explains its bonus payments must reflect a lower stock market.
Quite right. Are policy-holders so dim they cannot see that? Few people can enjoy a better investment than a Standard Life policy but the essence of such a contract is to stay the course. Compound interest performs its own miracles whatever is happening to the share market.
It might have been wiser for Edinburgh’s grandest money name to disdain any alteration to its practices. Better to counsel policy-holders with cool advice than penalise them for their lack of comprehension.
New leaders IT seems that the lifeboat facilities that saved Marconi from oblivion may now be adapted to save British Energy. The leading shareholders seem convinced survival will be more lucrative than any early bankruptcy and auction of its tangible assets. It is even mooted that larger share funds might even inject new capital into the ailing nuclear group.
Although old fashioned subsidies seem to be rejected by everyone, including ministers, it is agreed the DTI can change some of the rules under which British Energy operates. The discretionary room left to the UK authorities is limited. The Commission in Brussels looks vigilant at blocking assistance that is merely subsidy by another name. Suspension of the climate change levy might seem easy enough - it was always rum that a nuclear power source should be penalised for eco-offences of which it was plainly innocent.
Whatever happens, BE’s leadership must change unless they can demonstrate simple arithmetic was no part of their duties.
Flower powerWHAT is wrong with Dobbies shares? Or, perhaps, what is wrong with Dobbies?
The garden centres’ cash registers still seem to be ringing merrily. Its customer car parks are full. Yet its shares look limp at 388p compared with their peak of 527p. One explanation is that a wettish summer must be reflected in reduced trading and a more modest dividend. It might be argued they have expanded too quickly and have paid too much for their acquisitions. It could be no more than fashion. Dobbies were something of a novelty which enjoyed a vogue. That has evaporated.
To make their shares more notable the directors should send a selection of flowers or shrubs to every shareholder, or at least a generous discount voucher. Otherwise the firm’s leaders will each be receiving wreaths. The British remain gardening crazed. Competent garden centres can surely never fail if they listen to their market.
At anything beneath £4 each Dobbies shares look a bargain.
The full article contains 552 words and appears in Edinburgh Evening News newspaper.
