Property Income Plan and Equity Release

Penfold12

I have asked the question.

As soon as I get an an answer I will post up.

One point that does trouble me, and you have hit the nail on the head here, is the whole accounting practice. How can you have something that you do not own on your balance sheet?

reflective

thank you for taking the time to answer my question, however this is sounding more and more like a variant of a credit default swap. It would seem that the "insurers" are subordinating debt on the back of a packaged asset scheme, but gearing this exposure at the same time. This effectively turns the PIP into a insurance policy on the default on a spread of insurance companies, just like a credit default swap CDS was an insurance policy on the default of a cumulative debt obligation CDO. Before the credit crunch CDS's had an intrinsic value in that the default risk was deemed to be stable and hence predictable returns generated (insurance premiums, just like you pay for your car insurance!!, but in this case YOU are the insurer). Ironically, when the credit crunch hit the risk of default increased, this actually led to CDS's generating greater returns as the risk premium escalated. Ultimately, institutions defaulted, and the person who owns the CDS then had to fulfill their obligation and pay out the sum assure as the CDS owner was the default risk insurer. For example, prior to the credit crunch, CDS's could be purchased for between £300-500K, but each of these CDS's were providing default insurance to the tune of roughly 5 million Euros per contract. So, if you owned one of the CDS's and it defaulted, you wouldn't just lose your £300-500K, your obligation was to pay out 5 million euros.

Credit default swaps were also unregulated by the FSA.

Saying that, if you use an IFA, you could always sue him, but make sure he's not a limited company as he will just wind up.

One final point, again if you use an IFA, ask for a copy of his Professional Indemnity insurance policy, a special condition will have to be specifically included, that is if he has told his PI insurer what he's doing.

If you can sort out these last two points, your down side risk is zero.

Ian_W

GPow45 wrote: »

"Scam" is a strong word and an accusation which you are, obviously not qualified to make, though I do respect you have an opinion. However, opinions should be tempered by knowledge and you freely admit you have none on this product.
There are some excellent explanations in this forum which should be read and digested fully by all the visitors.

Another 1st poster puffing this product ... hmmm, smells of desparation.
This is a discussion forum, not advice, my opinion is worth what you paid for it - take it or leave it but if it waddles and quacks, it's a duck in my book!

You will lose out if you do not open your mind but, tragically, you may be responsable for others losing out.
This plan is a godsend in the current climate where a lot of us could do with some extra money.

Last "godsends" I remember were senior life policies and CF Arch Cru, just remind me where those are now? Oh, yes, Key Date/Life mark investors up !!!!!! creek with nery a paddle in sight. Cru investors doing much better, 18 months down the line I think around 7p in the £ has been returned whilst Capita blame Cru who point the finger at Arch and the FSA who authorised the scheme are like tweedle dummer!

IFA's are not like the old "Tied Agents" and are not out to take anybody for a ride. Commissions and fees are always a cause for concern but if someone gets you a load of money with no strings and no risks, why should they not be paid handsomely for it?

You say I might cause others to lose money because I offer an unqualified opinion. In the 2 cases above qualified opinion from IFAs lead to to people losing money but how many IFAs PI insurers are paying out? Some IFAs do act like salesman and when the do the no risk, no strings, high returnsare more likely to go to the IFA! The clients join the queues from Cru and Keydata with no-one to blame but themselves - at least according to the financial services industry!

Reaper

I'm a bit confused as to who is behind this scheme.

The normal reference is to "Equity IQ" who only started up in July and who I can find no information on other than their listing at Companies House. However a Google search finds Gateway Consortium International talking about hosting the training for the PIP. Incidentally their web site doesn't greatly inspire as there are many links that don't return anything - including, rather amusingly, "Ethics".

Now although Gateway International have a training site in the UK the company is registered in the Seychelles.

So are we dealing with the invisible new startup Equity IQ or the offshore Gateway Consortium?

Penfold12

The Gateway Consortium has the exclusive distribution of the product through their IFA members.

The Consortium negotiate favourable packages on behalf of their IFA's to promote/utilise.

The IFA and product provider deal direct, with Gateway in the background as a product negotiator. (GAteway will earn a commission on the products that they promote I am sure.)

Equity IQ are the company that everyone will deal with.

They are separately owned companies.

Reaper

Thanks for clearing that up. I look with interest to see what the details are when it is launched, though personally I am not convinced it ever will be. Having just listened to the Moneybox program I gather no UK insurer has signed up yet and it is doubtful it would do them any good even if they did. Still, I'll wait and see.

Penfold12

Thanks. Will try to keep up with the information flow. It may go silent for a while though, severe ear infection is keeping me down.

no1girlfommars

missile wrote: »

5% return on 50% of the value of my property portfolio with no risk seems too good to be true and I think it is another get rich quick scheme.

I was initially drawn to this. However I am dubious of the "no risk". There are too many examples of financial services industry playing fast and loose with other peoples money. No risk, becoming low risk, becoming you've lost money. What happened to the LLoyds names?

[TEXT DELETED BY FORUM TEAM] and Prudential circumvent EC regulation, IFAs get their cut and the rich get richer. Who carries the risk, .............. the tax payer who foots the bill for the next financial collapse.

Hello. does anyone know which other insurance companies are involved with this? It does seem too good to be true...

no1girlfommars

Reaper wrote: »

Thanks for clearing that up. I look with interest to see what the details are when it is launched, though personally I am not convinced it ever will be. Having just listened to the Moneybox program I gather no UK insurer has signed up yet and it is doubtful it would do them any good even if they did. Still, I'll wait and see.

If this is the case, the plan cannot go ahead as it needs insurers to work.

Doc_N

no1girlfommars wrote: »

It does seem too good to be true...

..........and we all know what that means.