Just when you thought you knew who had your money

In these days of a fiercely competitive financial services industry, consolidation seems to be the name of the game. Even the bigger players are not immune. Earlier this year, M&G investment manager was taken over by Prudential and Scottish Widows was bought by Lloyds TSB.

But where does it leave you if your investments change owner? And is there anything you should do about it? Phil Mutter, who lives in Croydon, has had a number of different companies running his policies and finds it increasingly difficult to keep track of them. Of his 15 policies, ranging from life assurance and personal equity plans (PEPs) to pensions, only two are with the original provider.

"At one stage it seemed that every time I received a letter about my policies, it had a different logo and letterhead on it," he says. "It isn't just that they've changed hands once, most have been through at least two changes of identity."

Most of Mr Mutter's policies are now owned by Windsor Life, even though they were originally taken out with four different names: Crown, Gresham, General Portfolio and GAN. Another policy, a PEP, started out under the GAN name, only to be taken over by Family Assurance, and his Crown pensions are now operated by Lincoln.

Suzanne Moore, of the Association of British Insurers, admits it can be confusing. She also says that there are likely to be an increasing number of takeovers and mergers. "We have seen a number of insurance providers merge or be taken over in the last few years. That trend is likely to continue and even speed up in the near future."

The ABI has produced a list of all life insurance providers and which firms have taken them over, designed to help anyone trying to find out more details about old policies.

It is important to remember that a new company need not mean bad news, says Graham Bates, of Bates Investment Services. "A fund may be strengthened by the merger if it's linking up with a stronger one, although it's not always the case."

He would recommend anyone in Mr Mutter's position to review investments regularly. "Looking at the funds he now has invested with Lincoln - it has generally underperformed compared with its sector averages over periods of one, three, five and 10 years." One fund, the Global unit trust, has underperformed in all four time frames. "This fund has even managed to fall in value by 3 per cent over a three-year term, when the average fund grew by 33 per cent," Mr Bates says.

Anne McMeehan, of Autif, the unit trust body, says that there are no hard and fast rules but investors should look at their options. "If you are happy with your policy's performance, you need to ask yourself if there will be much change to the way your investments will be managed," she says. "Sometimes the fund manager won't change - in effect, it will be the same fund."

If there is a change and you are not happy with it, you may be able to vote against it, says Ms McMeehan. "If the fund you're investing in is about to be absorbed into another bigger fund, you will be asked for your views. However, that isn't the case if your money is with the bigger player."

She also believes that with 1,800 unit trust funds in existence at the moment, many more will merge or take over others and in some cases it may be better to get out than stay. "If the new company or fund cannot put up a persuasive argument for you to leave your money with it, you should bite the bullet and move your money elsewhere," she says.

While many of us are getting used to the idea of taking a more hands- on approach with money we have specifically earmarked as an "investment", we are less likely to do that with our pension funds, says Tim Johnson, of independent financial advisers BMS Millsmith. "It's not the best idea to move your pension money around at the drop of a hat, but they are supposed to be flexible," he says. "That means if it could do better elsewhere, a move may be your best option."

Before you do switch your money, you should check the penalties for moving it and see how they compare with the potential benefits.

Useful contacts: ABI, 51 Gresham Street, London. EC2V 7HQ. Bates Investment Services, 0800 068 8655, BMS Millsmith, 0171 242 7968.

IF YOUR POLICY CHANGES NAMES

Find out whether the fund you have invested in is going to have different fund managers.

Ask if the charges will rise and whether the fund will still have the same investment objectives.

If your investments are getting new management, find out about its track record for the type of policy you have.

If you have a pension ask for a "transfer value". This will tell you how much money you have available to switch to another provider and takes into account penalty charges. The transfer value won't be able to tell you whether you'll be better off moving your money elsewhere, but an independent financial adviser will.

If you have an old policy and you are trying to track down the current providers, you can contact the ABI for its list of insurers.