The Children’s Mutual and Forester Life Announce Possible Transfer

After much consideration and following initial discussions The Children’s Mutual (formerly known as Tunbridge Wells Equitable Friendly Society) is announcing a possible transfer into Forester Life.

Graeme McAusland, Chief Executive of The Children’s Mutual says:

“I can confirm that the Board of The Children’s Mutual is considering a transfer into Forester Life. As a mutual society, we always look to act in our members’ and customers’ interests and are pursuing this aim during the next stage of negotiations.

“At this early stage, we have signed Heads of Agreement and have entered into a period of exclusive negotiations with Forester Life. Following a period of due diligence we hope to be in a position to write to members about the proposed transfer before the end of the year. All eligible members will be invited to vote on the proposed transfer at a Special General Meeting and we will of course also need to gain regulatory approval from the Financial Services Authority.”

Euan Allison, UK Group Managing Director of Forester Life says:

“We believe that this potential transfer would be beneficial to both members of The Children’s Mutual and our own members. We anticipate being able to provide better value for policyholders primarily through cost savings driven by economies of scale. It also offers the potential for all members to be a part of larger mutual organisation, supported by our parent organisation in Canada. Through the due diligence period we will work alongside The Children’s Mutual to come to the best solution for all members.”

Both organisations have individually over 130 years of experience in providing financial solutions for their members and bring a wealth of knowledge of the mutual sector to the transfer.

Questions and Answers

Please click on the question below to expand:

Why is The Children’s Mutual looking to transfer into Forester Life?

At this year’s AGM, we talked about some of the longer-term challenges the Society is facing, such as dealing with the costs of regulation and managing overheads across a reducing book as our With Profits Funds run off. To overcome these we have been looking at a range of options and we are investigating a proposed transfer of the Society’s business in to Forester Life as a result of that work. We believe that a potential transfer could present many benefits for our members and customers.

What is happening between now and a possible transfer?

At this stage we have entered into a period of exclusive negotiation with Forester Life. Both parties are now going through “due diligence” which is a process of gathering and evaluating information about the financial and legal position of each other and then we hope to be in a position before the end of the year to write to customers and members about the proposed transfer and the Special General Meeting. Eligible members will be invited to vote at the SGM on the proposed transfer and we will of course also need to gain regulatory approval from the Financial Services Authority.

What would a transfer mean for CTF customers?

Our Child Trust Fund customers are not members of the Society so they will not be eligible to vote though the Board will be fully considering their interests in assessing the merits of the transfer.

What happens to the current members and customers?

Throughout the period of due diligence we will work together with Forester Life to investigate the details as to what the transfer means for each of our members and customers. Following this we will be able to write to you all with more detail.

Who is Forester Life?

Forester Life is a UK life company based in Bromley, Kent and provides a range of straightforward financial solutions to help address protection, saving, investing and pension planning. Its products are designed to meet today’s needs for flexible terms, low charges and clear and simple plan conditions. Its UK network of financial advisers provides a home-based personal financial planning service backed up by award-winning technology.

Internationally, Foresters has over £10bn funds under management* and shares its financial strength with almost 950,000 members across the UK, USA and Canada.

As a mutual organisation, Foresters is driven to share not shareholder driven, and throughout its 135 year history has believed in enriching the lives of its members, their families and the communities they live in. For more information, please visit foresters.co.uk

How will the member vote work?

For the transfer to happen 75% of eligible members who vote will have to approve it. The vote will happen at a Special General Meeting for which all members will be given due notice to attend and vote. Alternatively members will be given the opportunity to vote through the post. We will provide details about the proposed transfer and voting when we send out details about the SGM.

Child Trust Fund holders are not members of the mutual and therefore do not have voting rights. Members under the age of 18 also do not have voting rights.

What do regulatory bodies such as the FSA think of the proposal?

Ultimately the Financial Services Authority will have to sanction the transfer but until the exact terms are agreed, it is too early for them to express any view.

What would the transfer mean for staff?

Our existing business activity needs to continue and will also involve taking on some additional activity around due diligence. We will continue to talk to all staff during this transition period and we appreciate it is an uncertain time. The support of our staff throughout this process is crucial and we thank them for their ongoing support through what we know is a difficult time for them.

What happens if the transfer fails through the vote or any part of due diligence finding a reason for it not to happen?

Whilst we are undertaking planning for this scenario, our current focus is on doing everything we can to make this transfer work and to ensure the best outcome for our members and customers through the proposed transfer.

Should the proposed transfer fail for any reason, the challenges we face as a small mutual in an increasingly tough regulatory environment would continue and we would have to investigate other options in overcoming them.

Notes to Editors

Please direct media enquiries to Katie Donlan at Consolidated PR

About The Children’s Mutual

The Children’s Mutual’s mission is to help parents, grandparents, family and friends fulfil their hopes for today’s children. We offer both a shares-based Junior ISA and Child Trust Funds, so whichever your child is eligible for, we could help you aim for a great start in life for them.
The Children’s Mutual has been focusing on family finance for nearly 130 years and has championed children’s savings for over a quarter of a century.
The Children’s Mutual is a trading name of the Tunbridge Wells Equitable Group, which includes the parent firm – Tunbridge Wells Equitable Friendly Society Limited, which is a mutual organisation, launched in 1881.

About Forester Life

Forester Life is a UK life company based in Bromley, Kent and provides a range of straightforward financial solutions to help address protection, saving, investing and pension planning. Its products are designed to meet today’s needs for flexible terms, low charges and clear and simple plan conditions. Its UK network of financial advisers provides a home-based personal financial planning service backed up by award-winning technology.
Internationally, Foresters has over £10bn funds under management (as at December 2011) and shares its financial strength with almost 950,000 members across the UK, USA and Canada.
As a mutual organisation, Foresters is driven to share not shareholder driven, and throughout its 135 year history has believed in enriching the lives of its members, their families and the communities they live in. For more information, please visit foresters.co.uk