Stonebanks: Back me or face the FSA

Stonebanks said IFAs have a duty of care to advise their clients to back demutualisation of Standard Life as he believes it is in their best interests to receive a windfall of up to 20% of their policy’s value.

He said: "If the policyholders are going to get shares worth 15%-20% of the value of their policy then it must be in their interests to vote in favour. If IFAs can justify how clients are better off by not collecting 15%-20% of the value of their policy then I will listen to them. It is a nonsense for IFAs to argue any other way."

But IFAs hit back, claiming Stonebanks had shot himself in the foot. Alan Steel, of Alan Steel Asset Management in Linlithgow, said: "Any credibility he had with the IFA and financial community before making those remarks is now gone. I don’t know where he gets his figures from, but you don’t have to be a rocket scientist to see that mutuals are strapped for cash right now. What is the benefit of demutualising Standard Life?"

Brian McCabe, principal at Brian McCabe Financial Services in Largs, said: "You can’t help wondering whether he [Stonebanks] is looking after himself first rather than policyholders in general when he says something as sweeping as that."

Retaining the support of the IFA community will be critical to Stonebanks if he hopes to win his demutualisation bid as thousands of policyholders will seek advice before voting to turn the mutual into a public limited company.

Paul Smee, director general of the Association of Independent Financial Advisers, added industry weight to the comments made by the Scottish IFAs and said he was "very surprised" by Stonebanks’ comments.

"IFAs have to look at the individual circumstances of each client and not make a generalised recommendation," he said. "I can’t understand where he is coming from."

But Stonebanks was unrepentant last night. He said: "IFAs want Standard Life to remain a mutual because of the fat fees it pays to them."

He will hand over 1,900 demutualisation request forms - almost twice the 1,000 he needs - to Standard Life on Tuesday.

Iain Lumsden, Standard Life chief executive, said: "Standard Life’s board continues to be unanimous in its determination to maintain the company’s mutual status. There is no business reason for the company to demutualise and we firmly believe that mutuality is in the longer term interests of our members.

"Feedback from customers and IFAs suggests that a large majority of them support Standard Life remaining mutual."

Standard Life will have three months to call an EGM. Once it has established that Stonebanks’ list of names is legitimate it will write to its 2.6 million policyholders.

Standard Life admitted yesterday that one million endowment customers may face falling pay-outs for the next 15 years.

The company said with-profits endowments would fall by 7% per year if investment returns averaged 8% a year.

Europe’s largest mutual is also facing criticism after making payments of C$20,000 to the Liberal party in Canada. One policyholder said the company declared in its annual report that it made no political donations. However, Standard Life said it is not obliged to declare donations made outside the European Union.

Malcolm Wood, director of legal services at Standard Life, said: "If the donation had been made in the UK it would have been disclosed."