Brexit preperations

As we’re sure you are aware, in the historic referendum held in June 2016, the British public voted in favour of the United Kingdom leaving the European Union (EU).

In leaving the EU, the UK looks likely to leave the Single Market, the European trade bloc that allows free movement of goods and people across international borders. This could present significant challenges to some businesses, particularly those that have high exposure to the EU.

At Shepherds Friendly we’re a fully UK-based company; all our transactions and operations are conducted within the UK, and the Shepherds Friendly Board would like to reassure all of our members that during this period of uncertainty it is very much business as usual.

Shepherds Friendly is a long-established and successful mutual, which has been around for almost 200 years and has experience in managing our members’ finances through varying economic conditions.

How we’re preparing for leaving the EU

The Board of Shepherds Friendly has been undertaking contingency planning on the possible impact of Brexit, a process that has involved our professional advisers, actuaries and investment managers.

Our With-Profits savings plans are primarily invested in a fund managed by Royal London Asset Management which holds a diversified range of assets, including UK and overseas equities, commodities, bonds and cash products. The fund seeks a return for members while managing volatility and downside risk through diversified multi-asset strategies.

As we head towards leaving the EU our investment managers will continue to lower the overall risk profile of the Society’s portfolio in order to protect our members’ funds.

It’s also worth noting that your savings at Shepherds Friendly are protected under the Financial Services Compensation Scheme (FSCS), a UK run and administered scheme, with compensations limits set by the Bank of England’s Prudential Regulation Authority.

Our process of ‘smoothing’ to protect your investments

At Shepherds Friendly we use a process known as ‘smoothing’ to protect our members’ investments from poor market conditions. As the value of the annual bonuses we pay depends on the performance of the Fund, we use smoothing to try to minimise the effects of stock market fluctuations and to meet our aim of paying our members an annual bonus.

When investment conditions are good, we may decide to hold onto some of the profit achieved in that period in order to compensate for any time when circumstances are less favourable. This means that during poor investment environments we may still be able to pay a bonus from the reserves we have acquired.

Unlike some more volatile stocks and shares investments, the value of our With-Profits plans will not fluctuate daily. Our plans are designed to offer returns in the medium to long-term.

How we performed in 2018

2018 was a challenging year for investments, with financial markets in a state of volatility for much of the year. The FTSE share index lost 12.5% of its value, the biggest fall in a decade, as markets reacted to worldwide political uncertainty. Despite this, we were delighted to announce to our members that we would be paying a bonus for the 16th consecutive year, something that we’re able to achieve due to our investment strategy.

What can you do to protect your investment in uncertain conditions?

During times of uncertainty people may become vulnerable and susceptible to messaging encouraging them to change investment decisions and transfer money to apparently more lucrative schemes.

Fraudulent companies and individuals tend to use this opportunity to push through many messages using fear and pressure, encouraging people to change or cash-in their products, or use this opportunity to steal your personal information. We encourage our members to remain vigilant, take care and time to consider any decisions or changes you want to make to your financial products before doing so, in particular when the suggestion to act has come from an unsolicited third party.

The Financial Conduct Authority (FCA) has a dedicated consumer website with more information on how you can identify, avoid and report a scam, which can be accessed here:

For more information on how individuals can prepare for Brexit, the government has also launched a website that you might find useful. It can be accessed here:

For any questions about your plan please call us on 0161 428 1212 or send us an email at [email protected]


If you decide to close your plan and leave the Society or transfer your investment to another provider, a Market Value Reduction (MVR) may be applied. For more details please see the PPFM document available on our website.

*When you take out an investment product with us your capital is at risk and you may get back less than you have put in.  Investment growth is by means of bonuses, the amount of which cannot be guaranteed throughout the term of the contract.*