Trevor Matthews' ambitions to lead a turnaround at Friends Provident suffered an early setback yesterday when it emerged that he might not be able to take charge as chief executive at the UK's fourth-largest insurer for another six months.

The development came as Friends prepared to unveil the findings of a strategic review today that could see it sell off valuable assets and even fend off a full-blown takeover bid from JC Flowers, the American private equity firm.

Mr Matthews resigned from his job at Standard Life, where he was head of the UK retail division, only on Tuesday afternoon. Friends Provident has formally told investors of his appointment but has yet to name a starting date.

Sandy Crombie, Standard Life's chief executive, told The Times that his group would be holding Mr Matthews to the terms of his contract, which states that he is not able to join a competitor for six months following his resignation.

“All employment contracts are built to protect both the individual and the employer. It is not a one-way street,” Mr Crombie said. “The protection for the employer is over their intellectual property rights. We can effectively hold him for six months.”

Asked whether Standard Life would be enforcing the bar, Mr Crombie said: “Absolutely. Standard Life has a great many developments in train. We wouldn't want them walking into a competitor while they remain very much alive for us. We must protect Standard Life.”

Standard Life and Friends Provident are close competitors in several key business areas, including individual life insurance and pension sales and financial products for high-net-worth individuals.

Friends has Lombard, its tax-driven investment company for the super-rich. Standard Life has recently launched Standard Life Wealth, also targeting well-heeled investors and savers. Standard has been suggested as a potential buyer for Friends.

Friends said it “will be looking into the issue” of enforced gardening leave for Mr Matthews but appeared to have been taken by surprise by events yesterday. It is expected to approach Standard Life to try to negotiate a deal.

A six-month block on Mr Matthews joining Friends would mean that the 55-year-old Australian could have to wait until the end of July or even early August before starting as chief executive.

Shares in Friends Provident fell more than 4.4 per cent, down 7.1p to 155.2p, as analysts and investors speculated that the latest move made a bid for the insurer less likely.

Greig Paterson at Keefe, Bruyette & Woods said Mr Matthews' gardening leave was “fuelling the argument that a standalone scenario for Friends Provident could be more likely”.

He said a takeover was still possible, however. Mr Matthews could have been offered a “golden parachute” in the event that Friends was taken over, “making it more palatable for him to accept the chief executive's job even if the Friends Provident board were still willing to consider offers for a full takeout”.

Friends disclosed no fresh details about the arrival of Mr Matthews yesterday, including the terms of his salary package.

However, it is possible that Mr Matthews has taken a pay cut to join Friends. According to Standard Life's most recent annual report, he collected a bonus of £748,000 on top of his basic salary of £505,000 in 2006.

Philip Moore, his predecessor at Friends, who was ousted late last year, received a total package over the same period of £636,000.

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