We like the stock even if it floated at 270p. We estimate that the true value of the share lies between 287p and 318.5p.

Henk Potts of Barclays Stockbrokers

If you want to sell your shares instantly, you should have elected to receive a share certificate in advance. Without this certificate, most brokers will not let you trade.

This means that anyone who has not elected to have their share certificates sent before the flotation will probably have to wait until mid-July to sell.

Friends Provident is despatching share certificates for these investors on 16 July.

Hold or sell?

Analysts have two main concerns over the long term prospects of Friends Provident's share price.

It recently issued a profit warning and is in a sector that is under pressure from all sides.

The whole life insurance industry is still tainted by the Equitable Life and endowments misselling scandals.

Profits in the pensions sector are also under threat from the introduction of stakeholder pensions - as stakeholder pension charges are capped at 1%, there is less room to make money from commissions.

Experts are predicting a period of consolidation in the industry, and believe that Friends Provident could be a rich-picking for a larger competitor.

Friends Provident will join the FTSE 100 on Monday

James Dalby of Bates Investment Services says: "It is a case of watch this space. Of course we can't predict the future, but given what has been happening in the industry over the last few years, it could be possible."

It could be worth waiting. Provident shareholders may receive a premium on top of their shares, if the company is taken over.

Shares over cash

Previous high-profile demutualisations suggest it is better to hold onto the shares, rather than sell and put the money in a top-paying savings account.

Investors who held onto shares for more than three years after Alliance & Leicester, the Woolwich, and Halifax floated on the stock market have fared well.

For example, investors who have kept their shares in Alliance & Leicester over the past four years are about �850 better off than if they had sold their shares immediately and put their money into one of the best savings accounts.

Long-term prospects

Henk Potts, investment manager at Barclays Stockbrokers is upbeat about the prospects for Friends Provident shares.

He says that despite the recent profit warning, the company has good long term prospects particularly in group pension sales.

The company is also expanding its asset management division and has good infrastructure and computer systems.

He says: "We like the stock even if it floated at 270p. We estimate that the true value of the share lies between 287p and 318.5p."

'Invest elsewhere'

Other analysts are not so upbeat. Damion Larkin of the Share Centre does not think it has good prospects.

"I think people should use the strength of the share price, sell and then invest in one of the other three major life and pensions companies - CGNU, Legal & General and Prudential."

He warns people to keep a close eye on the share price over the next few weeks or months, and then sell as soon as it starts to drop.

Tracker funds that mirror the FTSE 100 are obliged to buy the share as long as Friends Provident remains in the elite index.

He believes this will buoy the share price for a while.