Pru/Scottish Amicable Endowment Top???

dunstonh

I am totally disillusioned with the whole finance industry

Thats a bit harsh isnt. The vast majority do a good job and behave correctly. Why measure them all the a minority. Not that there is any indication of wrong doing in what you say but you give that impression.

since I don't understand how a company can sell such a woeful product then wash its hands of it because it was sold through a third party.

They didnt sell you a product. The estate agent did. The liability for the advice and information you were given is with the seller. The provider just recieved instructions in the post which they acted on.

If a car fell apart, the manufacturer would not be allowed to brush off customers because they did not purchase it from them directly.

The product hasnt fallen apart. The product has not failed in any way.

I have a quote from Scottish Amicable with a projected surplus of almost £9K (not guaranteed, of course), but am now looking at a shortfall of £8K, so a miss of £17K;

Your shortfall is 9k. Not 17k. Projections are just examples of what you could get back if a certain rate of return is achieved. That is why projections are usually given with at least 2, usually 3 different rates of return and with the risk warnings that you could get back more or less than the projections.

I don't think any of us would be in our jobs long if we worked on such results.

Most jobs dont require a condition of having a crystal ball and trying to predict the unpredictable.

The big joke is that the finance industry has shown itself completely incapable of managing investments

That doesnt seem to match reality.

And to top it all, when they tell you your investment is failing (due to market conditions of their own making), they advise taking out FURTHER investment cover the shortfall they've caused.

Which is typically the best course of action from an historic point of view. Buy more when its cheaper and it will be that amount which goes on to the make the most money.

Unfortunately, this current situation means that, although most of the mortgage will end next year, costs will actually increase to cover the shortfall, and so we are looking at selling our house and downsizing, with an opportunity to pay off the remaining mortgage and finally be free. If only I did not need a bank account or card for so many things these days.

Your shortfall is of a size that you are acutally still possibly better off than you would have been on a repayment mortgage. A typical endowment mortgage was cheaper on like for like basis. If was a very common reason why people chose endowment mortgages. That monthly cost on an average sized mortgage of 20 years ago would see a saving of around £20pm typically. Over 20 years that is £6000 difference. Not dissimilar to your shortfall figure.

The things which have caused investments to get lower returns are also the things which have brought mortgage rates to all time lows (and previous sustained lows prior to credit crunch). So, whilst it hit regular contribution investments harder, the wealth was made up elsewhere (house prices, lower credit interest rates). If the old economy had continued that favoured endowments you would have been paid a surplus but you would overall be worse off.

cjph

Thanks - I feel better now.

cj

dunstonh

cjph wrote: »

Thanks - I feel better now.

cj

No problem. It helps to understand the issues (and there certainly are issues) rather than fire off with the accuracy of a scud missile.

Froggitt

cjph wrote: »

Am not sure if this forum is live any more but my Scottish Amicable policy matures next March after 25 years. The projected £56K endowment is now expected to be £8K short at £48K, leaving me unimpressed to say the least. And the nice lady on the phone tells me it includes 'all' bonuses due, including the 1997 further bonus.

Search for the thread on "scottish amicable further bonuses" in this forum. Ask Pru where the further bonuses are, and if they say none are due, ask for a final letter, and then go to the FOS. My case is being investigated by the FOS right now.