Whether or not Trevor Matthews, highly regarded head of Standard Life’s UK retail division, stays or jumps ship to Friends Provident, the life assurer faces awkward questions when it updates new business figures on Wednesday.

Mr Matthews, who was approached by Friends Provident and held talks with the life assurer, has also held talks with other companies.

People who know him say he is still weighing the situation. He wants the top job at Standard Life and a decision will hinge on his chances of succeeding Sandy Crombie, chief executive, who turns 60 in just more than a year.

The uncertainty is unnerving some analysts and investors and is thought to have contributed to a sharp fall in the share price. Shares in Standard Life have fallen 28 per cent over the past six months, underperforming the FTSE life assurance sector by 20 per cent. They touched a low of 185¼p in intraday trading last week. The share price recovered to close at 226¾p on Friday but this is still below Standard’s 230p float price and last May’s high of 349½p.

“What is going on at the top is unsettling,” says Roman Cizdyn, analyst at Oriel Securities.

A big shareholder puts it more bluntly: “It all looks very messy up there.”

Uncertainty over Mr Matthews, who was a key driver of the restructuring of Standard Life’s UK life and pensions business, is the last thing the life assurer, which came to market in a £4.7bn demutualisation less than two years ago, needs.

It is still reeling from its failed £4.7bn bid for Resolution, the specialist investor in closed life funds. Standard Life, working with Swiss Re, walked away after being outmanoeuvred by entrepreneur Hugh Osmond, who built a 24 per cent stake in Resolution and trumped Standard Life’s offer less than an hour after it was announced.

The unsuccessful bid for Resolution raised questions about Standard Life’s strategy. Before the offer for Resolution, it had been focused on organic growth. According to one analyst, Standard Life will be under pressure to make a clear statement on its direction and leadership.

But the debate about Mr Matthews has revived speculation in the City and Edinburgh about tensions at the top of Standard Life.

At the time of the failed bid there were hints that not all at the helm of the life assurer were in favour of the assault. It was seen as driven by Gerry Grimstone, chairman, and David Nish, the newly appointed finance director. Mr Crombie is thought to have been persuaded by the logic of the deal. Mr Matthews stayed in the background. Standard Life and its advisers have consistently denied tensions.

Before the bid Mr Nish had been tipped as frontrunner to succeed Mr Crombie.

People familiar with the situation say no work has started on the succession. But some insiders believe the company is under increasing pressure to make a statement. Shareholder concerns could accelerate the timetable.

Some analysts and investors are nervous about Standard Life’s main engine of growth: self-invested personal pensions. Investors flocked into Sipps, which allow them to hold a wide range of assets within their pensions, including equities and property, while markets were roaring ahead.

The consensus of analysts’ forecasts is for Standard Life to report worldwide sales of £16.2bn for 2007, on a present value of new business basis, compared with £14.6bn in 2006. UK life and pension sales are forecast to rise 16 per cent to £13.3bn. UK life and pension sales rose 45 per cent in the first half.

Standard Life Investments, the fund management arm, is expected to report net inflows on Wednesday. But it is expected that Sipps sales have slowed and new business been hit by proposed changes to the capital gains tax regime.

According to Bruno Paulson, analyst at Sanford C Bernstein, Standard Life has “bet the farm on Sipps”. In the third quarter of 2007, he says, Standard Life’s share of Sipp sales fell sharply from about 30 per cent to nearer to 25 per cent. “Sipp sales are something to keep a beady eye on. [But] one quarter does not make a crisis.” Standard Life will be hoping he is right.