Site Update
By the way, if you find it a bore to have to go to this site via my main site www.kenfrost.com, you will be pleased to know that I now have a more direct route for you to use.
You can now use the web address www.endowmentdiary.com to access this site.
Thursday, September 16, 2004
Wednesday, September 15, 2004
FSA Broke The Law
The start of the appeal hearing by Legal and General, against the fine imposed on it by the Financial Services Authority, revealed some interesting backstage dealing.
It seems that the Financial Services Authority, by offering to "cut a deal" with Legal and General over the size of the fine imposed on it, may have broken the law.
The FSA offered to reduce its £1.3M fine on L&G, if L&G promised not to proceed with its appeal against the fine.
That's a bit cheeky, isn't it?
The law, it seems, is unequivocal on this point; the FSA cannot use means, such as offering to reduce fines, to deter or obstruct firms from going to an appeals tribunal.
L&G are contesting that the FSA changed their minds about the quality of L&G's processes, in respect of endowment sales, after publicity about mortgage shortfalls in 1999/2000.
The FSA claimed that L&G's systems for processing endowments were deficient, and resulted in L&G mis-selling the products to "financially unsophisticated customers including an unemployed housewife."
The outcome of this hearing will be watched by everyone in the life assurance industry. If the FSA loses, it will embolden other life assurance firms to stand up to the FSA.
The start of the appeal hearing by Legal and General, against the fine imposed on it by the Financial Services Authority, revealed some interesting backstage dealing.
It seems that the Financial Services Authority, by offering to "cut a deal" with Legal and General over the size of the fine imposed on it, may have broken the law.
The FSA offered to reduce its £1.3M fine on L&G, if L&G promised not to proceed with its appeal against the fine.
That's a bit cheeky, isn't it?
The law, it seems, is unequivocal on this point; the FSA cannot use means, such as offering to reduce fines, to deter or obstruct firms from going to an appeals tribunal.
L&G are contesting that the FSA changed their minds about the quality of L&G's processes, in respect of endowment sales, after publicity about mortgage shortfalls in 1999/2000.
The FSA claimed that L&G's systems for processing endowments were deficient, and resulted in L&G mis-selling the products to "financially unsophisticated customers including an unemployed housewife."
The outcome of this hearing will be watched by everyone in the life assurance industry. If the FSA loses, it will embolden other life assurance firms to stand up to the FSA.
Tuesday, September 14, 2004
The Curate's Egg
It is reported that the Financial Ombudsman Service (FOS) is upholding complaints, against banks and building societies, for mis-selling endowment policies pre 1988.
In fact it is now upholding around 90% of complaints, excellent!
However, before people raise a cheer, there is a fly in the ointment; those of us who were sold a policy via an "independent" financial adviser (IFA) pre 1988 have no recourse.
The complaints against banks and building societies are being upheld because they were members of the FOS scheme pre 1988, independent financial advisers were not; the FOS is apparently powerless to investigate, and of course the IFA's are rejecting pre 1988 complaints out of hand.
Life is a bitch!
It is reported that the Financial Ombudsman Service (FOS) is upholding complaints, against banks and building societies, for mis-selling endowment policies pre 1988.
In fact it is now upholding around 90% of complaints, excellent!
However, before people raise a cheer, there is a fly in the ointment; those of us who were sold a policy via an "independent" financial adviser (IFA) pre 1988 have no recourse.
The complaints against banks and building societies are being upheld because they were members of the FOS scheme pre 1988, independent financial advisers were not; the FOS is apparently powerless to investigate, and of course the IFA's are rejecting pre 1988 complaints out of hand.
Life is a bitch!
Saturday, September 11, 2004
The Rotten Core at The Heart of Britain's Financial System
The following is an extract of an article published yesterday on "In Your Face", the article is entitled "The Rotten Core at The Heart of Britain's Financial System".
"The endowment mis-selling scandal, of the late eighties and nineties, readily springs to mind as one of the major failings of our financial system. As has been well documented, the life assurance companies used the bull market to create a totally unsuitable, and useless product, that they aggressively sold in the manner of TV sets and washing machines to over 8 million unsuspecting home owners.
The theory being that the bull market would create high yield returns on this product; that would not just pay off the mortgages of the hapless holders, but would also give rise to a modest surplus. Needless to say, what the life assurance companies did not bother to clearly tell people was that their commission charges would rob the product of much of its initial value, and that their projections for growth were totally unrealistic.
It now turns out that the 8 million holders, of these white elephants, are facing shortfalls of over £40BN. Although, in theory the policyholders can try to claim compensation, the life assurance companies are using every excuse in the book to slow the process down in order to avoid paying compensation. To date a paltry £1BN has been paid to those seeking redress.
The FSA, although they offer some fall back position for those refused compensation by the life assurance companies, do not have any intention of ?rocking the boat? too hard. The FSA refuse to acknowledge the fact that the life assurance companies perpetrated the greatest financial scandal in the UK in living memory."
To read the full article visit "In Your Face", and click on the document entitled "The Rotten Core at The Heart of Britain's Financial System".
The following is an extract of an article published yesterday on "In Your Face", the article is entitled "The Rotten Core at The Heart of Britain's Financial System".
"The endowment mis-selling scandal, of the late eighties and nineties, readily springs to mind as one of the major failings of our financial system. As has been well documented, the life assurance companies used the bull market to create a totally unsuitable, and useless product, that they aggressively sold in the manner of TV sets and washing machines to over 8 million unsuspecting home owners.
The theory being that the bull market would create high yield returns on this product; that would not just pay off the mortgages of the hapless holders, but would also give rise to a modest surplus. Needless to say, what the life assurance companies did not bother to clearly tell people was that their commission charges would rob the product of much of its initial value, and that their projections for growth were totally unrealistic.
It now turns out that the 8 million holders, of these white elephants, are facing shortfalls of over £40BN. Although, in theory the policyholders can try to claim compensation, the life assurance companies are using every excuse in the book to slow the process down in order to avoid paying compensation. To date a paltry £1BN has been paid to those seeking redress.
The FSA, although they offer some fall back position for those refused compensation by the life assurance companies, do not have any intention of ?rocking the boat? too hard. The FSA refuse to acknowledge the fact that the life assurance companies perpetrated the greatest financial scandal in the UK in living memory."
To read the full article visit "In Your Face", and click on the document entitled "The Rotten Core at The Heart of Britain's Financial System".
Wednesday, September 08, 2004
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?
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?
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.
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