Thursday, August 28, 2008

The Great Swindle

The Great Swindle

Tony Hazell in The Daily Mail writes:

"With-profits policies must be the most widespread con ever perpetrated on British investors. Very few people over 30 will have completely avoided having some of their money mismanaged in these massive funds.

But aside from a few mis-selling fines, the insurance companies responsible have got away with this great swindle

I couldn't agree with him more!

The life assurance companies should set this matter straight and underwrite these useless products that have been badly designed, and massively mismanaged.

They won't of course, because too many people in these companies have made far too much money by way of commissions and bonuses; ie greed, rather than integrity, is the overriding principle at play here.

Tuesday, August 19, 2008



Mortgage advisers have blamed policyholder greed for the endowment policy disgrace. conducted a study that showed that 87% of people believed that they were mis-sold policies by brokers, who failed to explain in sufficient detail the possible shortfalls.

However, some advisers have taken umbrage at this slur and claim that a combination of personal greed and changing market conditions have contributed to the failure of these policies.

Alan Townley, of Dave Alan Financial Services, is quoted:

"Let's make no mistake, people are greedy and although you can spell out that past performance does not equate to future performance it tends to fall on deaf ears when they can only see pound signs in front of them."

I believe that a more fundamental problem is to blame, quite simply many of the policies are not fit for purpose. They were designed to pay off the mortgage, yet are manifestly failing to do so.

When a newly purchased TV or car fails to function, the owner can claim redress; so it should be for the policy holders of these poorly designed and badly managed products.

Blaming market conditions and greed is an easy excuse, the real blame lies with a lousy design and excess management charges (for precious little quality management).

The costs for this scandal should be met by the companies that run these underperforming products.

Saturday, August 16, 2008

The Endowment Rip Off

The Endowment Rip Off has published research that shows 90% of people who own a useless and underperforming endowment product believe that they were victims of mis-selling.

The research also showed that 86% of endowment policyholders were expecting their policy to suffer a shortfall.

Of those who felt their had bought their policy after receiving poor advice, 49% said they had been given a guarantee that the policy would cover the mortgage costs, while 27% say the risks involved were not made clear. A further 6% felt fees and charges had not been properly explained.

Something that our financial services industry can be proud of?