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Endowments, fit for purpose?
Mortgage_Payer_2
Posts: 2 Newbie
The previous posting appears to have disappeared in the recent upgrade, so I'll post it again:
Hi,
I've ploughed through some of the earlier posts regarding endowments and fitness for purpose, I thought I'd add this:
Should endowments be fit for purpose? I've written to my MP regarding endowments and fitness for purpose, he is now in correspondence with a treasury official on my behalf, the treasury official doesn't appear to want to provide straight forward answers to my straight forward questions about fitness for purpose ....
Unfortunately, one person asking questions about endowments and fitness for purpose probably won't make much difference.
If an endowment policy is sold in conjuction with a mortgage then the purpose of the endowment is to repay the mortgage on maturity. If it doesn't repay the mortgage sum then it is not fit for purpose.
The issue of fitness for purpose is paramount; the Select Committee on Treasury – 5th Report (25th February 2004), section 2, paragraph 9 states that:
“>9. Buying a home is the largest single financial transaction most people undertake in their lives and the financial services industry owes a particular duty of care to its customers in the marketing and subsequent management of relatively complex financial products such as endowment mortgages. Unfortunately, the reality is that in selling low-cost endowment mortgages the industry often failed to provide homeowners with a suitable product for their individual circumstances or a product that was fit for the purpose it was being used for.<”
“ …the (financial services) industry often failed to provide ..... a product that was fit for the purpose it was being used for.”
An endowment is a product and should be fit for purpose. Simple.
The internet link to the report is:
http://!!!!!!.com/5ds29
BTW, the main reason endowment policies are not performing is incompetent fund managers.
Friday, January 24, 2003, the FTSE stood at 3,603.7
Monday, January 17, 2005, the FTSE stood at 4,846.7
This 33% increase over two years would have eliminated the majority of shortfalls completely, provided the fund managers had managed the funds correctly (which is what they are paid to do).
The problem should be responsibility of the insurers and the financial advisors, not the customers.
Hi,
I've ploughed through some of the earlier posts regarding endowments and fitness for purpose, I thought I'd add this:
Should endowments be fit for purpose? I've written to my MP regarding endowments and fitness for purpose, he is now in correspondence with a treasury official on my behalf, the treasury official doesn't appear to want to provide straight forward answers to my straight forward questions about fitness for purpose ....
Unfortunately, one person asking questions about endowments and fitness for purpose probably won't make much difference.
If an endowment policy is sold in conjuction with a mortgage then the purpose of the endowment is to repay the mortgage on maturity. If it doesn't repay the mortgage sum then it is not fit for purpose.
The issue of fitness for purpose is paramount; the Select Committee on Treasury – 5th Report (25th February 2004), section 2, paragraph 9 states that:
“>9. Buying a home is the largest single financial transaction most people undertake in their lives and the financial services industry owes a particular duty of care to its customers in the marketing and subsequent management of relatively complex financial products such as endowment mortgages. Unfortunately, the reality is that in selling low-cost endowment mortgages the industry often failed to provide homeowners with a suitable product for their individual circumstances or a product that was fit for the purpose it was being used for.<”
“ …the (financial services) industry often failed to provide ..... a product that was fit for the purpose it was being used for.”
An endowment is a product and should be fit for purpose. Simple.
The internet link to the report is:
http://!!!!!!.com/5ds29
BTW, the main reason endowment policies are not performing is incompetent fund managers.
Friday, January 24, 2003, the FTSE stood at 3,603.7
Monday, January 17, 2005, the FTSE stood at 4,846.7
This 33% increase over two years would have eliminated the majority of shortfalls completely, provided the fund managers had managed the funds correctly (which is what they are paid to do).
The problem should be responsibility of the insurers and the financial advisors, not the customers.
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