Standard Life Shares: To Buy or Not To Buy

There’s just a few days left for those eligible to buy Standard Life shares at a 5% discount to make their minds up as to whether they should bother with the purchase or not.

As with any share purchase, it’s a difficult decision to make, and past demutualisations probably do not give any real insight into how the Standard Life shares will perform when they finally hit the market.

Scotland on Sunday asked five financial advisers what they would do. Of the five, four said they would buy the shares, but obviously, a lot can depend on your own situation.

If this is the only stock you are going to buy then it’s not a very good thing to own stock in just one company. However, if you actually do have a range of investments and this is not all you own then I think that what is being offered here is actually pretty good for several reasons. First of all, Standard Life is a much stronger business than it was, say, five years ago and so fundamentally the business is looking better. Secondly, the price has just been discounted by the stock market going down, which has probably made [the offer] better. Thirdly, if you are buying them up to limit at the moment and holding for a year then you are effectively getting a double discount, which is an incentive, and finally Standard Life is going to be in the FTSE 100 so all tracker funds are going to have to buy the thing, which gives security.

As well as the 5% discount on the purchase of the shares, there is also a 5% bonus available if you hold the shares for over a year. This is probably done to encourage more people to hold onto their shares rather than simply cashing them in on day one.

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