Asset Income Plan

Reaper

jimjames wrote: »

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?

If I have understood it correctly I think the theory is that insurance companies that must have a minimum level of assets to back them up can bypass the requirement by borrowing your house to put on their books. That means they don't have to lock up money they could be investing and so may be willing to pay a fee for it, which is still cheaper than actually having to own full price assets of their own.

All sort of questions then arise, such as whether your house is safe. I think the theory is you take out an insurance policy against the possibility of ever having the debt called in. However in the event of another financial collapse the idea of one insurance company defending you against another insurance company is not entirely reassuring. I can just imagine the whole lot coming down like a pack of cards. Remember all the GEBs where the guarantee part was being covered by Lehmans and turned out to be worthless?

I love the idea of free money but would need a huge amount of reassurance before I bet the house on a scheme like this.

Loughton_Monkey

irs101 wrote: »

Is this the product you're talking about?

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

Well done!

Looks like FSA doing their job!

Eco_Miser

maximuss wrote: »

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

You refered to a mythical EU directive about straight bananas. The real directive upon which the myth is based was a straight copy of British Standard defining how bent a class 1 banana could be. It had been in existance for years with no press comment, but when it was re-issued from Brussels the press made a big fuss about the EU telling us how our fruit should be shaped. Since you repeated the myth, perhaps your knowledge of the other matters in your post is at the same level?

maximuss_2

Eco MIser

I could respond but I won't bother thanks.


If anyone is concerned about this plan, perhaps you should seek qualified expert advice before commiting yourselves. When I say qualified I mean ask someone who has knowledge of the plan and can give un-biased legal advice.

For those of you who don't plan to take up this plan then you dont have anything to wory about.

My own position is this. I will continue to gather as much information as possible on this plan.When I am satisfied that the plan is secure, with the insurance policy that will be paid for by the participating insurance company, the insurer being an independent well known insurer, I might then start to recommend the plan.Uuntil then I remain open minded.

dunstonh

If anyone is concerned about this plan, perhaps you should seek qualified expert advice before commiting yourselves. When I say qualified I mean ask someone who has knowledge of the plan and can give un-biased legal advice.

The compliance company I use has told all its IFAs to not transact in this area due to significant risks.

So, you have the FSA issuing warnings and IFAs being told to not recommend it by their compliance companies. How much more warning do you need?

maximuss_2

"The compliance company I use has told all its IFAs to not transact in this area due to significant risks".

"So, you have the FSA issuing warnings and IFAs being told to not recommend it by their compliance companies. How much more warning do you need"?

dunstonh, you probably have been in this business a while and no doubt you have had to deal with the never ending matter of meeting with compliance approval. Risk assessment seems to be the most recent concern for compliance and is no doubt aimed at keeping down P.I insurance. No surprise that they will issue warnings without knowing the facst. How do I know they dint have the facts? I recently had a compliance audit, the "Risk Assessor" had never heard of the plan and indeed the full details have not yet been finalised. We don't know the full facts and yet you have decided that this product is no good and should be avoided. The FSA warning was for people to be aware, as I am sure they would recommend no matter which financial advice a consumer seeks.It is that, a warning and they have not said don't get involved with the plan.
If the FSA or indeed any other organisation who are so concerned about people losing their homes because of making the wrong financial decisions, why don't they warn people to plan for the eventuality of needing long term care? They don't tell people that there is a chance under certain circumstances that wealth intended to be passed to the next generation could be taken to pay for someones care if they have assets above a certain level.They don't make it known that there are financial and legal arrangements to mitigate against this eventuality.

The Asset Income Plan I understand with have an added layer of protection in addition to being fully insured to protect the customer and home fully. Of all the advisers I have spoken to all say that unless the plan is water tight, they wont be recommending the plan to their clients, myself included.

Yes there have been negative comments about the plan, some from equity release companies concerned that this plan will challenge their products and fee charging ability.

I know I am repeating myself again but please, please, can we wait until we know the facts!!!. I can assure you, if this plan proves to be risky, I do not believe to many of my fellow advisers will promote this plan. The A.I.P will only be part of our business which we would not Jeopardise for the sake of a quick buck.

Reaper

I'm still waiting to hear if they really exist. There has been talk about them for ages, but has any application actually completed?

irs101

maximuss wrote: »

The FSA warning was for people to be aware, as I am sure they would recommend no matter which financial advice a consumer seeks.It is that, a warning and they have not said don't get involved with the plan.

How many financial products are out there? And how often do the FSA issue this kind of warning? I think we can draw our own conclusions how serious their concerns must be!!

Perhaps we all need to read a bit more carefully between the lines!

maximuss_2

I agree with the last 2 posts, we need more information and as far as I am aware no applications have been completed as yet.

On that basis no one will have lost anything or gained anything. No one has been misled or sold something that does not meet their requirements.

When I know more I will let you all know, but for the moment everything is academic really.