The Endowment Diary

The Endowment Diary


The Endowment Mis-selling Debacle - one of the UK's worst financial scandals

Wednesday, April 27, 2005

Sir Brian Stewart's Deluded View of Reality

Sir Brian Stewart's Deluded View of Reality

Sir Brain Stewart, chairman of Standard Life, gave an interview recently in which he expressed the desire to bring back the endowment policy.

He went on to say that endowment policies "weren't all bad news", and that they had "worked for a lot of people".

I have to ask, I wonder on which planet Sir Brian is exactly residing?

There are currently 8 million people facing a shortfall on their useless and underperforming endowment policies.

Does he seriously think that this shows that these unloved and useless products work?

Let us remind ourselves of some of the problems with these products:

1 They don't work

2 The commissions being charged by the life assurance companies further reduce their value

3 Many of the life assurance companies mismanaged them, so that their returns are even worse than the norm

4 Many life assurance companies paid out too much in the way of bonuses in the late 80's and early 90's, in order to attract new customers and to prop up their share price.

The result?

The funds were stripped bare of reserves, for the leaner times ahead.

5 Many of the life assurance companies are doing their level best to hinder the compensation process, hardly a sign of integrity or honesty

6 There are very strong rumours that many life assurance companies knew, as early as the late 80's, that the policies would fail. Yet they sat on their hands and did nothing!

The above points, and they are not exhaustive by any means, clearly show that the reputation of the products and the companies that sold them have been irreversibly shot to pieces.

The above should give any level headed individual good cause to think twice before re-inventing these useless products.

Sir Brian please take note.

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