Asset Income Plan

maximuss_2

On another matter, it is not risky for a Financial Adviser to involve themselves in un- regualted products. As long as the client attitude to risk is established and the advice is correct, tehn there is no reason why an adviser cannot recommend these products. It is the advice that is relevant as far as the FSA are concerned. I might add that Buy to let mortgages are still un regualted as is commercial finance and yet banks readily provide these products, incidentley recommended by Financial Advisers.

Eco_Miser

maximuss wrote: »

Dont forget that this is an E. U directive, remember straight bananas?

Straight cucumbers, bent bananas, and the EU directive was identical to the existing British Standard.

maximuss wrote: »

please try and balance your therories with facts.

You too.

Reaper

Firstly as mentioned on the other thread there is a good MoneyBox piece on this which any potential investors should listen to. It's here
http://www.bbc.co.uk/iplayer/console/b00tjvxk/Money_Box_04_09_2010
Fast forward to 8 mins 30 seconds to hear it.

Maximuss - you are a financial advisor who wants to sell these policies, so perhaps you can tell me whether they actually exist. The previous thread claimed they were being launched in a matter of weeks but that was 6 months ago. Do they really exist, have any insurers signed up (not just expressed an interest), and have any policies been sold? My guess is the answer to all those questions is "no", but stand ready to be corrected.

dunstonh

maximuss wrote: »

On another matter, it is not risky for a Financial Adviser to involve themselves in un- regualted products. As long as the client attitude to risk is established and the advice is correct, tehn there is no reason why an adviser cannot recommend these products. It is the advice that is relevant as far as the FSA are concerned. QUOTE]

We will just ignore the FSA warnings issued to advisers on using unregulated investment schemes then.

I did make it clear that I was not referring to all. However, the risks of using an unregulated investment scheme are higher as you have to show the same due diligence as a regulated scheme yet the business providing the investment doesn't have to follow the same rules. You couldn't rely on their marketing material and doing satisfactory due diligence would be difficult. Not impossible. But the adviser would have to be on guard and not rely on the fact that is is unregulated to get out of doing what is best. You would also have to make doubly sure that the individual really understands that it is unregulated so they dont get the consumer protections or the FSCS protection that regulated schemes do.

Whilst the most recent warning issued by the FSA referred to UCIS, the principle applies to all unregulated schemes.

I might add that Buy to let mortgages are still un regualted as is commercial finance and yet banks readily provide these products, incidentley recommended by Financial Advisers.[/

Correct. However, they are provided by FSA authorised companies. Commercial arrangements are different to retail consumers.

Just to summarise, yes it can be done but the adviser is taking a risk and has to jump through more hoops.

edinburgher

If maximuss is (as I suspect), trying to ramp this scheme, he/she isn't doing a very good job of it. Caveat emptor.

Loughton_Monkey

maximuss wrote: »

....The charge would sit on the balance sheet as an asset. On that basis, with adequate assets to satisfy the capital adequacy requirements, an insurer can continue to operate their business profitably. .....

Well listen to the Money Box snippet, and you'll find that this is unlikely to be true for this country. To be an asset (for solvency) it must be valued at market value. Such a 'charge' on someone's home has no market value.

maximuss_2

Eco miser, perhaps you can elaborate?I am not quite sure what you are getting at with the reference to British Standards.

Reaper. I am not as yet selling these policies or plans, however I am considering them. They do exist not only for home owners but for commercial properties too. As far as I can establish, there are quite a few Companies who have or are in the process of taking up these plans.

The money box programme discussed the Property Income Plan. This plan has had some changes and from what I have been told under advisement of the FSA.
Insurance Companies have signed up to these plans and they are also insured by a very well know insurance company.

I cant say if anyone has actually entered into a contract as yet as the plan has only just been launched, I do however know a lot of pre launch applications are being processed.

dunstonh. I agree with your comments. The product regardless of it being regulated or not does not exempt an adviser from giving best advice and treating customers fairly which includes ensuring the customer understands the risk.By the way, the Insurance Company holding the charge carries an insurance policy for any lossess.

edinburgher. I am not trying to ramp the product but neither am I trying to rubbish .I am taking on board comments raised here to look at this plan through othere peoples eyes. I am privaleged that I know a little more than some, but I welcome other opinions. If I were to take on the role of promoting this product I would be spending this time to promote it on a larger scale . Buyer beware! Quite right, as I have said, seek independent legal advice first.

Those who are not sure, dont enter into the plan, wait and see what happens. Just a thought, this plan might just be on the level, it might just provide much needed income for people who are finding it difficult in these times, it might just enhance someones life, it might not but as an Adviser I owe it to myself and my clients to study the subject and qualify myself better before I make a final judgment, all I ask is that you all do the same.

jhxmt

elkayem wrote: »

If the Insurance Company become insolvent, there is an insurance policy protecting which pays the value of the charge.
This all sounds a bit too good to be true. Can anyone point out any loopholes I may be missing?

I'd be curious who pays the premiums on that insurance policy. If it's the homeowner, then the return they're getting is reduced by the premiums they're paying.

If it's the insurer-with-the-charge, then (a) they're paying 5% + premiums for the ability to have the charge on their balance sheet, which seems excessive and (b) if they were to become insolvent, presumably they would not only want to call on the charge but would also not have been able to keep up the premium payments, meaning the 'protective' policy wouldn't be valid.

I'd guess the Plan itself could be a valid product, but I just don't see where the (inevitable) catch is, which would make me very wary.

irs101

Is this the product you're talking about?

http://www.fsa.gov.uk/pages/consumerinformation/firmnews/2011/crossroads_product.shtml

jimjames

I'm still struggling to understand this and no clearer after my previous post.

Money is being magically produced from nothing and with nothing to show for it. How can money appear from nowhere?