The Decline of The IFA
This is Money reports that 10 years ago there were about 350,000 financial advisers. However, increased regulation and the impact of the endowment misselling scandal has severely reduced their numbers down to 55,000.
It seems that it is not just the hapless policyholders who are paying the price for these underperforming and useless products.
Wednesday, March 29, 2006
Thursday, March 23, 2006
Legal & General U Turn
Legal & General U Turn
Legal & General have announced that they will tell over 600,000 endowment policyholders that they have only six more months to claim compensation, if they believe they were mis-sold the products.
Up until now, L&G now had been one of the few large endowment policy providers to rule out "time-barring" customers.
L&G has started to send out letters to their policy holders this week, covering the new time bar rule and informing the policy holders about their projected returns/shortfalls on polices.
Only Prudential and Nationwide Building Society are keeping an open commitment to consider complaints.
The clock is ticking.
Legal & General have announced that they will tell over 600,000 endowment policyholders that they have only six more months to claim compensation, if they believe they were mis-sold the products.
Up until now, L&G now had been one of the few large endowment policy providers to rule out "time-barring" customers.
L&G has started to send out letters to their policy holders this week, covering the new time bar rule and informing the policy holders about their projected returns/shortfalls on polices.
Only Prudential and Nationwide Building Society are keeping an open commitment to consider complaints.
The clock is ticking.
Tuesday, March 21, 2006
The Dangers of Interest Only Mortgages
The Dangers of Interest Only Mortgages
The Times has a good article about the dangers of interest only mortgages, I recommend that you read it.
The Times has a good article about the dangers of interest only mortgages, I recommend that you read it.
Wednesday, March 08, 2006
The Danger of False Hope
The Danger of False Hope
Ivan Lewis, Treasury economic secretary, has warned that the thousands of Scots who were mis-sold endowment mortgages by solicitors should not hold out "false hope" of obtaining compensation.
Lewis admitted that it was a scandal that a legal loophole prevented those, who bought a policy through a lawyer before 2001, from seeking financial redress in the event of a shortfall
He is quoted as saying:
"One of the difficulties (with a new financial safety net) is it's not retrospective. I do have great sympathy for people who have been caught out by endowment mis-selling in Scotland but there is a genuine problem."
Scots who bought policies from solicitors before December 1 2001, when the Financial Services and Markets Act came into effect, do not qualify for a deal from the Financial Ombudsman Service.
The solution is for the life assurance companies, that manage these useless policies, to underwrite them.
Ivan Lewis, Treasury economic secretary, has warned that the thousands of Scots who were mis-sold endowment mortgages by solicitors should not hold out "false hope" of obtaining compensation.
Lewis admitted that it was a scandal that a legal loophole prevented those, who bought a policy through a lawyer before 2001, from seeking financial redress in the event of a shortfall
He is quoted as saying:
"One of the difficulties (with a new financial safety net) is it's not retrospective. I do have great sympathy for people who have been caught out by endowment mis-selling in Scotland but there is a genuine problem."
Scots who bought policies from solicitors before December 1 2001, when the Financial Services and Markets Act came into effect, do not qualify for a deal from the Financial Ombudsman Service.
The solution is for the life assurance companies, that manage these useless policies, to underwrite them.
Friday, March 03, 2006
HBOS Hit By Endowment Losses
HBOS Hit By Endowment Losses
HBOS has announced that it made £4.81BN in pretax profits last year.
However, owing to the endowment scandal it had to take a £260M provision for endowment mis-selling.
HBOS has announced that it made £4.81BN in pretax profits last year.
However, owing to the endowment scandal it had to take a £260M provision for endowment mis-selling.
Thursday, March 02, 2006
Lloyds Endowment Hit
Lloyds Endowment Hit
Last week Lloyds reported profits of £3.82BN for 2005.
However, the charge for compensation for paying customers for mis-selling endowment policies rose from £100m in 2004 to £150m in 2005.
Whilst this cost affects the results, and of course the shareholders, I doubt that the people who sold these underperforming and useless products will have been affected; ie the senior managers will still receive bonuses.
Last week Lloyds reported profits of £3.82BN for 2005.
However, the charge for compensation for paying customers for mis-selling endowment policies rose from £100m in 2004 to £150m in 2005.
Whilst this cost affects the results, and of course the shareholders, I doubt that the people who sold these underperforming and useless products will have been affected; ie the senior managers will still receive bonuses.
Wednesday, March 01, 2006
You Have Been Warned
You Have Been Warned
The Financial Services Authority have stated that it is standard practice for endowment providers to continue paying commissions to mortgage advisers, while policies remain active, even if the holders have paid off their mortgage.
This means that even though the endowment policy that you hold may not reach target, the person/company who sold you the mortgage will still be receiving a commission.
This of course will reduce the value of the policy.
Happy with that?
The Financial Services Authority have stated that it is standard practice for endowment providers to continue paying commissions to mortgage advisers, while policies remain active, even if the holders have paid off their mortgage.
This means that even though the endowment policy that you hold may not reach target, the person/company who sold you the mortgage will still be receiving a commission.
This of course will reduce the value of the policy.
Happy with that?
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