Further Endowment Confusion
As if endowment policy holders were not confused and worried enough, there is now a report that suggests that some of the warnings of shortfalls may in fact be wrong.
According to Independent Financial Adviser, Alan Lakey of Highclere Financial Services, not all endowments linked to a mortgage, where red or amber warning letters have been issued, will suffer a shortfall.
In a report in Money Management magazine, he warns that some are being sent out where no real risk exists.
"What began as an exercise designed to advise policyholders of the probable maturity value of their plans, and the possible need to take remedial action, has since turned into a major bloodletting,".
Lakey makes the point that the typical reprojection letter appears to show the with profit endowment as off track, and unlikely to hit the relevant target. However, he points out that not all red or amber warning letters are issued on the same basis.
He also notes that the deluge of warnings has led to the creation of a compensation industry, designed to extract money from the hapless policy holders.
To my view the best way for the life assurance industry to restore some of their shattered credibility, and brand value, would be for them to unconditionally underwrite their endowment products.
This would, at a single stroke, eliminate the need for a compensation industry which is living off the misery of policy holders.
Monday, August 29, 2005
Tuesday, August 23, 2005
Standard Life
Standard Life
Nice results from Standard Life.
Standard Life announced a 4% rise in first-half revenues today, as business improved in its home market, boosted by new personalised pension plans.
The insurer, which is expected to float next year, said insurance sales for the first six months of 2005 rose from £593M to £619M and sales of life products and pensions in its key home market rose 10% to £459M.
I wonder if their endowment policy holders are also feeling pleased?
Nice results from Standard Life.
Standard Life announced a 4% rise in first-half revenues today, as business improved in its home market, boosted by new personalised pension plans.
The insurer, which is expected to float next year, said insurance sales for the first six months of 2005 rose from £593M to £619M and sales of life products and pensions in its key home market rose 10% to £459M.
I wonder if their endowment policy holders are also feeling pleased?
Thursday, August 18, 2005
Selling Endowments
Selling Endowments
The Scotsman has some interesting background material about selling endowment policies, see Selling Endowments.
However, as they warn, this does not constitute investment advice and you should seek independent financial advice if you are unsure as to the suitability of any investment for your circumstances. Past performance is not an indication of future performance. The value of investments may fall as well as rise and you might not get back the full amount invested.
The Scotsman has some interesting background material about selling endowment policies, see Selling Endowments.
However, as they warn, this does not constitute investment advice and you should seek independent financial advice if you are unsure as to the suitability of any investment for your circumstances. Past performance is not an indication of future performance. The value of investments may fall as well as rise and you might not get back the full amount invested.
Monday, August 08, 2005
Standard Life Fails To Deliver
Standard Life Fails To Deliver
According to new figures, those people unfortunate enough to have an endowment policy maturing with Standard Life this year will not only miss out on any windfall but have had to endure a further decline in their investments over the past year.
It seems that Standard Life's useless endowment policies have produced a negative return of 2.7% this year.
Pathetic!
The figures were revealed as Standard Life unveiled its mid-year "bonus declaration", and made a useless attempt to focus attention on one-year returns of existing policies rather than the year-on-year change for maturing policies.
I think that it is time for the hapless holders of these useless, and underperforming, polices to act up.
According to new figures, those people unfortunate enough to have an endowment policy maturing with Standard Life this year will not only miss out on any windfall but have had to endure a further decline in their investments over the past year.
It seems that Standard Life's useless endowment policies have produced a negative return of 2.7% this year.
Pathetic!
The figures were revealed as Standard Life unveiled its mid-year "bonus declaration", and made a useless attempt to focus attention on one-year returns of existing policies rather than the year-on-year change for maturing policies.
I think that it is time for the hapless holders of these useless, and underperforming, polices to act up.
Friday, August 05, 2005
HBOS Increases Provisions
HBOS Increases Provisions
HBOS has reported an interim six month profit of £2.2BN, an increase of 15%.
In view of this success HBOS has set aside an other £130M, on top of the existing £130M already set aside, to cover claims for endowment policy misselling.
HBOS increased their dividends by 9% to 11.75p.
HBOS has reported an interim six month profit of £2.2BN, an increase of 15%.
In view of this success HBOS has set aside an other £130M, on top of the existing £130M already set aside, to cover claims for endowment policy misselling.
HBOS increased their dividends by 9% to 11.75p.
Monday, August 01, 2005
From Bad To Worse
From Bad To Worse
The endowment policy crisis could be far worse than experts expect.
That is the view of Clive Cowdery, chief executive of Resolution Life. He predicts that the amount of assets held in close funds funds will double to £400BN, in the next five years, as more insurers shut off their funds to new money.
Closed funds do not take in contributions, their only purpose is to pay existing liabilities; in other words they are winding down, as such their returns are lower than open ones.
Cowdery believes that closed funds will account for 15 million policies by 2011.
That will be when the "fun really starts"; as people realise that their funds don't work, and wake up to the fact that they have a debt that they cannot afford to settle.
I would hope that, despite the fact that the life assurance companies are doing their best to sweep the biggest financial scandal of the 20th century under the carpet, people wake up to this disaster a little earlier than that.
Time for the politicians to wake up as well!
The endowment policy crisis could be far worse than experts expect.
That is the view of Clive Cowdery, chief executive of Resolution Life. He predicts that the amount of assets held in close funds funds will double to £400BN, in the next five years, as more insurers shut off their funds to new money.
Closed funds do not take in contributions, their only purpose is to pay existing liabilities; in other words they are winding down, as such their returns are lower than open ones.
Cowdery believes that closed funds will account for 15 million policies by 2011.
That will be when the "fun really starts"; as people realise that their funds don't work, and wake up to the fact that they have a debt that they cannot afford to settle.
I would hope that, despite the fact that the life assurance companies are doing their best to sweep the biggest financial scandal of the 20th century under the carpet, people wake up to this disaster a little earlier than that.
Time for the politicians to wake up as well!
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