The Gloves Are Off
It seems that the forthcoming appeal by Legal and General (L&G) against the fine handed down from the Financial Services Authority (FSA), for endowment mis-selling, has ruffled the feathers of the FSA.
It is reported that John Tiner, the CEO of the FSA, feels that L&G's attempt to "tough it out" with the FSA should not be taken as an example by other firms of how to stand up to the FSA.
Do I detect a touch of arrogance here?
L&G are breaking new ground, as being the first big life assurance firm not to roll over and "play dead" when the FSA hands down a fine.
It will be interesting to see how they do.
In an amusing twist of fate; it emerged that David Prosser, CEO of L&G, is chairing the Financial Services Skills Council (FSSC).
The FSSC has been set up to train the 1.3 million people working in the financial services industry; and is, by a strange quirk of fate, taking over the FSA's responsibility in this field.
A case of "poacher turned gamekeeper" perhaps?
Wednesday, September 08, 2004
Monday, September 06, 2004
A Watershed Moment
A watershed in the endowment mortgage mis-selling scandal has been reached, a blast on the trumpets please..............
The £1BN barrier has been breached!
Life assurance companies have now paid over £1BN in compensation, to holders of their white elephant useless underperforming endowment policies.
That, on the face of it, is good news; isn't it?
I am afraid not, it represents a "drop in the ocean".
The current estimate for shortfalls on these policies, is running at £40BN to £100BN plus. The £1BN represents only 2.5% of the lower estimate.
A watershed in the endowment mortgage mis-selling scandal has been reached, a blast on the trumpets please..............
The £1BN barrier has been breached!
Life assurance companies have now paid over £1BN in compensation, to holders of their white elephant useless underperforming endowment policies.
That, on the face of it, is good news; isn't it?
I am afraid not, it represents a "drop in the ocean".
The current estimate for shortfalls on these policies, is running at £40BN to £100BN plus. The £1BN represents only 2.5% of the lower estimate.
Friday, September 03, 2004
Reuters report that the Financial Services Authority (FSA) has issued a warning to life insurers, that they may be underestimating their liabilities due to poor record keeping.
That's not very encouraging news, is it?
It seems that the FSA's investigation, into the working practices of with profits life assurers, has identified that most firms do not review whether their obligations (ie what they owe you, the policy holder) were being met.
I would ask the question here, what the hell are these companies doing then?
It seems to me that this would be a fundamental procedure; after all, if you don't know as to whether you have met past obligations how the hell do you know if you will be able to meet future ones?
Additionally, it seems that some firms no longer have the key original documents; outlining their obligations, for some products.
Those of us who have been battling to receive compensation, for our hopelessly underperforming and useless endowment policies, can certainly attest to this problem. My earlier claim hit the buffers, partly because key paperwork had long since been disposed of.
Even more alarmingly, it seems that some smaller firms have been drafting contracts for new products without any legal input or review.
Excuse me, but I thought that we lived in a modern Western country with laws and regulations? These companies seem to be operating in a manner more akin to those tin pot operations based in Nigeria who, via unsolicited emails, offer vast sums in exchange for your bank details and a fee (See the Stupid Punts section of my site for examples of these scams).
The good news is that the FSA want life assurers to review their procedures, and report back by 30 November.
That's alright then, isn't it?
That's not very encouraging news, is it?
It seems that the FSA's investigation, into the working practices of with profits life assurers, has identified that most firms do not review whether their obligations (ie what they owe you, the policy holder) were being met.
I would ask the question here, what the hell are these companies doing then?
It seems to me that this would be a fundamental procedure; after all, if you don't know as to whether you have met past obligations how the hell do you know if you will be able to meet future ones?
Additionally, it seems that some firms no longer have the key original documents; outlining their obligations, for some products.
Those of us who have been battling to receive compensation, for our hopelessly underperforming and useless endowment policies, can certainly attest to this problem. My earlier claim hit the buffers, partly because key paperwork had long since been disposed of.
Even more alarmingly, it seems that some smaller firms have been drafting contracts for new products without any legal input or review.
Excuse me, but I thought that we lived in a modern Western country with laws and regulations? These companies seem to be operating in a manner more akin to those tin pot operations based in Nigeria who, via unsolicited emails, offer vast sums in exchange for your bank details and a fee (See the Stupid Punts section of my site for examples of these scams).
The good news is that the FSA want life assurers to review their procedures, and report back by 30 November.
That's alright then, isn't it?
Thursday, September 02, 2004
Back To The Future
Which has just issued a report, the findings of which could have been based on the experiences of the owners of endowment policy holders who were sold these underperforming white elephants in the 1980's.
The sad, and rather alarming, feature of the report is that it is based on research carried out by Which, this year.
Which checked out approximately 40 financial advisers, in well known banks and building societies; only three of these "professionals" offered satisfactory advice.
The "revelation" of the report was that advisers concentrated on selling life assurance, rather than on giving advice.
Sound familiar?
Remember when we were told that the smart way to cover a mortgage was with an endowment policy?
Among those "professional" institutions visited were Abbey, Halifax, HSBC, Lloyds TSB, NatWest, Nationwide and Northern Rock.
It seems that the advisers did not make it clear that they were only able to recommend in house mortgages. This is a clear breach of the Mortgage Code.
In other words, despite the endowment policy mis-selling debacle (the biggest financial scandal of the century), it seems that not a single lesson has been learned by our trusted and respected financial institutions.
Based on this, are you confident that the financial institutions will handle your endowment complaint in a professional and unbiased manner?
I suggest you sign my petition, if you are worried.
Which has just issued a report, the findings of which could have been based on the experiences of the owners of endowment policy holders who were sold these underperforming white elephants in the 1980's.
The sad, and rather alarming, feature of the report is that it is based on research carried out by Which, this year.
Which checked out approximately 40 financial advisers, in well known banks and building societies; only three of these "professionals" offered satisfactory advice.
The "revelation" of the report was that advisers concentrated on selling life assurance, rather than on giving advice.
Sound familiar?
Remember when we were told that the smart way to cover a mortgage was with an endowment policy?
Among those "professional" institutions visited were Abbey, Halifax, HSBC, Lloyds TSB, NatWest, Nationwide and Northern Rock.
It seems that the advisers did not make it clear that they were only able to recommend in house mortgages. This is a clear breach of the Mortgage Code.
In other words, despite the endowment policy mis-selling debacle (the biggest financial scandal of the century), it seems that not a single lesson has been learned by our trusted and respected financial institutions.
Based on this, are you confident that the financial institutions will handle your endowment complaint in a professional and unbiased manner?
I suggest you sign my petition, if you are worried.
Tuesday, August 24, 2004
The Death of a Thousand Cuts
Yet more cuts in bonus rates have been foisted on endowment policy holders.
This time, it is Friends Provident who give policy holders a kick in the guts; they have reduced their payouts on maturing policies by 3%. This reduction is expected to affect around 1 million endowment policy holders, and is their fourth cut in 18 months.
Reports indicate that, for example, the payout on a £50 per month 25 year endowment will fall from £51K to £48K (in 2003 the same policy was worth £62K).
To my humble view, using a technical term here, these people are simply "taking the piss" out of endowment policy holders.
Friends Provident claim that the reductions will ensure: "that there will be a closer alignment of policy payouts with their underlying investment values."
In other words, the policies are worth "F**k All"; and they, Friends Provident and other life assurance companies, are simply softening up the hapless holders for this bombshell by the death of a thousand cuts.
If you haven't signed my petition yet, then don't you think it is time that you did?
Yet more cuts in bonus rates have been foisted on endowment policy holders.
This time, it is Friends Provident who give policy holders a kick in the guts; they have reduced their payouts on maturing policies by 3%. This reduction is expected to affect around 1 million endowment policy holders, and is their fourth cut in 18 months.
Reports indicate that, for example, the payout on a £50 per month 25 year endowment will fall from £51K to £48K (in 2003 the same policy was worth £62K).
To my humble view, using a technical term here, these people are simply "taking the piss" out of endowment policy holders.
Friends Provident claim that the reductions will ensure: "that there will be a closer alignment of policy payouts with their underlying investment values."
In other words, the policies are worth "F**k All"; and they, Friends Provident and other life assurance companies, are simply softening up the hapless holders for this bombshell by the death of a thousand cuts.
If you haven't signed my petition yet, then don't you think it is time that you did?
Wednesday, August 18, 2004
It is reported that Norwich Union will be introducing a one year time limit, for customers who complain about mis-sold endowment mortgages.
People with a complaint will have 1 year to lodge the complaint, once they receive their third "red letter".
Norwich Union is writing to its 1 million plus policy holders about their "initiative".
The last round of red letters from Norwich Union, is reported to have only given comfort to 13% of policy holders that their polices would reach their target.
To date it is reported that Norwich Union has received 34000 complaints for mis-selling, 17000 of these have been upheld.
People with a complaint will have 1 year to lodge the complaint, once they receive their third "red letter".
Norwich Union is writing to its 1 million plus policy holders about their "initiative".
The last round of red letters from Norwich Union, is reported to have only given comfort to 13% of policy holders that their polices would reach their target.
To date it is reported that Norwich Union has received 34000 complaints for mis-selling, 17000 of these have been upheld.
Thursday, August 12, 2004
Saturday, August 07, 2004
It seems that it is not just the hapless endowment mortgage owner who is being hit by underperforming endowment products.
It is reported that Policy Portfolio and Beale Dobie, two specialist firms which buy up people's unwanted policies and sell them on to other investors, will no longer be buying endowment policies; and would sell off their current stock.
Policy Portfolio and Beale Dobie are owned by Investec.
It is reported that Policy Portfolio and Beale Dobie, two specialist firms which buy up people's unwanted policies and sell them on to other investors, will no longer be buying endowment policies; and would sell off their current stock.
Policy Portfolio and Beale Dobie are owned by Investec.
Friday, August 06, 2004
What Goes Up, Goes Up Again
Interest rates went up again yesterday, they now stand at 4.75%. This rise will inevitably negatively impact mortgage rates.
City "experts" predict that the full 0.25% will be passed on to borrowers; with more rate rises likely, mortgage holders face an uncertain future.
This is of course exacerbated by the fact that the shortfalls on the non performing endowment policies are predicted to worsen.
All in all, it is not a very rosy picture.
Interest rates went up again yesterday, they now stand at 4.75%. This rise will inevitably negatively impact mortgage rates.
City "experts" predict that the full 0.25% will be passed on to borrowers; with more rate rises likely, mortgage holders face an uncertain future.
This is of course exacerbated by the fact that the shortfalls on the non performing endowment policies are predicted to worsen.
All in all, it is not a very rosy picture.
Monday, August 02, 2004
Another "Little Problem" With Endowment Policies
Those of you who are fed up with holding on to your endowment policies, and are thinking of cashing them in, need to be aware of the latest problem coming to light in the savings industry.
It seems that providers of with profits savings products have thought up another ruse, by which they prevent the poor saps who bought these underperforming policies from collecting what is rightfully theirs.
They make use of Market Value Adjusters (MVA's), which are penalties applied to people who cash in their with profits savings plan early. It seems that the owners of these policies are only just becoming aware of the existence of these penalties; as the companies that operate these polices, and the IFA's that recommended them, failed to tell people of their existence when they bought them.
In the event that you are not happy with being charged a penalty to withdraw from an underperforming and useless endowment policy, then you are at liberty to complain to the Financial Ombudsman.
Good Luck!
Those of you who are fed up with holding on to your endowment policies, and are thinking of cashing them in, need to be aware of the latest problem coming to light in the savings industry.
It seems that providers of with profits savings products have thought up another ruse, by which they prevent the poor saps who bought these underperforming policies from collecting what is rightfully theirs.
They make use of Market Value Adjusters (MVA's), which are penalties applied to people who cash in their with profits savings plan early. It seems that the owners of these policies are only just becoming aware of the existence of these penalties; as the companies that operate these polices, and the IFA's that recommended them, failed to tell people of their existence when they bought them.
In the event that you are not happy with being charged a penalty to withdraw from an underperforming and useless endowment policy, then you are at liberty to complain to the Financial Ombudsman.
Good Luck!
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