Endowment maturity value??

dunstonh

I must have amazing foresight then, as I recognised them as the rip-off investments they were in the 90's, when practically every bank, building society and broker was trying to persuade you to take one out with your mortgage.

Good for you. I am sure your prophecy led to a large band of follows who now chant you name as some messiah

Endowments went obsolete around the mid 90s. There were some stragglers but even most of the direct sales forces had pulled out by 98. Direct marketing kept them running to the early 2000s but they were not advised cases but mailshots.

zagfles

dunstonh wrote: »

Good for you. I am sure your prophecy led to a large band of follows who now chant you name as some messiah

Endowments went obsolete around the mid 90s. There were some stragglers but even most of the direct sales forces had pulled out by 98. Direct marketing kept them running to the early 2000s but they were not advised cases but mailshots.

It was hardly rocket science, there were plently of articles written about what a rip-off they were, even in the 80's and early 90's. For anyone who bothered to investigate for themselves, rather than relying on what some commission hungry bank, broker or IFA told them.

Any policy that takes the first two year's premiums in charges is clearly a rip-off. If the stock market rises at 10-15% a year then that can be hidden in growth, but if it doesn't there's nothing to hide the charges with. That's why they went "obsolete" in the mid 90's. Otherwise why aren't they still sold now? If the basic product is sound?

Endowments were only invented because the Labour govt of the 70's saw savings as an evil capitalist thing and so imposed a super-tax on savings, whereas insurance was good and so should get tax relief. Endowments were basically savings policies disguised as insurance, so they got the tax treatment of insurance. When the savings supertax and tax relief on endowments both went, all that was left was a rip-off policy with hideously high charges.

Which is basically the jist of several articles I read in the late 80's/early 90's. I chose to believe them instead of the high street banks and lying mortgage brokers. I was right. And all my followers take their tin-foil hats off to me :rotfl:

nicksss

I'm with the OP on this issue, and am in the same boat with a predicted shortfall of up to £25,000 due in the next 2 yrs.

I simply cannot fathom that these endowment companies can produce a set of figures without any evidence to show how they have been calculated.

This is surely a licence to print money. They could pay me anything they like.
I expect they have paid themselves bonuses over the years - for what?
There must surely be in place a system that can show where my money has been invested, and how it has performed over the past 25 years, year by year, month by month.

Accepting what they say cannot be an option. I expect a shortfall, but I want to see evidence of how it has arisen.

Don't forget, we are talking about the finance industry here - if we have to accept endowment payment shortfalls with no evidence, no recourse to regulatory bodies, if this system is not policed, then this has the potential to be one of the biggest scams going.

(climbs down off soapbox)

dunstonh

I'm with the OP on this issue, and am in the same boat with a predicted shortfall of up to £25,000 due in the next 2 yrs.

They are not predictions. They are example projections using example rates of return which are statistically unlikely to be accurate.

I simply cannot fathom that these endowment companies can produce a set of figures without any evidence to show how they have been calculated.

They do product figures in a fund report. Depending on the type of fund, the detail will vary. Unit linked funds have easier to follow reports than with profits funds.

This is surely a licence to print money. They could pay me anything they like.

No they cannot.

I expect they have paid themselves bonuses over the years - for what?

The With Profits fund has been the cause of most of the UK's insurers being forced to close their doors or sell up. Those that are trying hard to dump their legacy book as it is a weight around their neck that they do not want.

Don't forget, we are talking about the finance industry here - if we have to accept endowment payment shortfalls with no evidence, no recourse to regulatory bodies, if this system is not policed, then this has the potential to be one of the biggest scams going.

You are jumping to a number of assumptions which are not correct.

COLOURBOUNCE

nicksss, regardless of the response here, clearly from industry knowledge, you sum up the feeling of most people that have had to endure this financial mess. The system has failed in many ways, and policy holders have been left to pick up the tab. Posters here depend on the industry to make a living, good luck to them. I for one, will never listen to 'sound' advice from one again. These companies made shed loads and gave too much up during the 'smoothing' process whilst giving more up in bonus and commission spikes.
This industry is built on this hideous mentality, and will not turn any time soon. There will be only one winner with your money, you may come second if very, very lucky.

nicksss

I'm sorry Dunstonh, but if you're an IFA, then you're the last person I need advice from.

I ask the question again,surely there should be some more supporting evidence as to how the final payouts are determined?
Who polices this system? If no-body, then the system is open to abuse.

opinions4u

nicksss wrote: »

I'm sorry Dunstonh, but if you're an IFA, then you're the last person I need advice from.

That's a ridiculous statement. Perhaps suggesting that you don't actually understand what an IFA does.

I ask the question again,surely there should be some more supporting evidence as to how the final payouts are determined?

it depends on the policy type. A unit linked policy is crystal clear. A with profits policy is a little more complex. But, unless my knowledge is out of date, a mutual company can remove no more than expenses from the fund. A plc an remove no more than 10% of the profits from the fund. Everything else is the policyholders' money and is ring-fenced accordingly.

Who polices this system? If no-body, then the system is open to abuse.

Actuaries and accountants on behalf of the companies. Complying with FSA regulations along the way.

Endowment funds have not covered themselves in glory. A few reasons:

- lower interest rates than when the original projections were calculated.
- lower long term investment returns compared to previous performance.
- a move to "safer" investments effectively meaning shares were sold when the market was low.

Not defending the performance. I've suffered as much as the next man. But there are reasons other than those you imply.

dunstonh

I'm sorry Dunstonh, but if you're an IFA, then you're the last person I need advice from.

Clearly you dont understand the role of an IFA. I will excuse your ignorance for now.

I ask the question again,surely there should be some more supporting evidence as to how the final payouts are determined?

There is.

Who polices this system? If no-body, then the system is open to abuse.

actuaries and accountants write the reports which are published and the FSA monitors them as well as periodically reviewing them in more depth or gets the insurer to run stress tests etc.

dunstonh

Posters here depend on the industry to make a living, good luck to them.

I don't. I depend on my clients to make a living.

I for one, will never listen to 'sound' advice from one again.

You shouldnt listen to advice from a provider or representative of a provider/retailer. That goes for any retail market. They are clearly going to present the better side of their product. They are paid to do that. Hence why independence is better.

COLOURBOUNCE

Mmmm.. I bought my Endowment through an independant.