With Profits?

kidmugsy

Thomas2500 wrote: »

I should have mentioned that I am still paying into my occupational pension on a part time basis. I plan to live on this at 60 and leave my AVCs invested for as long as I can before going into draw down. I have no plans to buy an annuity. Thanks to everyone for their replies which have been extremely helpful.

When I drew my main DB pension I left the AVC alone, and later transferred it to a SIPP. That gambit wouldn't suit everyone.

dunstonh

That commission was paid to the hoards (literally hundreds of thousands) of provincial spivs that over the years had a go at being "financial advisors", and who too easily made purring noises to punters like "can't go far wrong with Norwich Union", and then "can't go too far wrong with Aviva".

Irrelevent. The commission was paid out of charges. not the fund.

Are some still receiving tail commissions annually on pre-2012 sales they made?

trail commission does not exist on life funds.

Punters cannot trust any WP provider with their money.

Dangerous rubbish. People reading need to know that you are posting incorrect and bad information.

Advisers who still purr that you should be ok in any WP fund worry me.

Its a good job no-one is saying that.

You make me very concerned by the way you gloss over WP on these forums, dunstonh.

When you know more about it, then others will take in an interest in what you say.

agarnett

Are you trying deliberately to throw readers off the scent, dunstonh?

If a policycharge on an old 1980s endowment or Section 226 pension was £1 flat per month out of a £25 per month premium, what was going on if initial up front commission was paid at a sum equivalent to around an entire year's premium and if trail commission totalled typically 2½% of the annual premium thereafter?

Can we take a guess? Advance commission based on the entire 25 year period of the policy. 25 x 12 months @ £1 pm policy charge = £300 i.e. the same as the first year's premium!

The renewal or trail commission then might eventually equate to another entire year's premium on a kind of life insurance salesman lifestyle support system - if the policyholder kept paying until the end. And even if you are right that because endowment policies contained a life insurance element there was no renewal commission (although I am not sure that was the case with my company), the initial commission was certainly a bad enough hit on the client's early years investment don'tcha think? Certainly if the client tried to surrender the policy early, he'd find a rather large chunk obviously missing!

So what's with the hair-splitting - commissions come out of charges not the fund? Commissions came out of what you paid the provider - virtually all of what you paid in the first year and maybe more. What ended up in the "fund" with your name on it was anyone's guess of a small amount until the basic sum plus annual bonuses had gained some traction in later years. But instead for many, in later years they were told that annual bonuses could no longer be sustained and we started hearing of shortfalls. No shortfalls for the sellers or providers though.

It was once suggested in the old days of the endowment gravy train, that if you got just 100 good customers, you were set up for your entire life insurance and investment advising career. Remember that? Or too young?

What the FCA has to say about trail commission means your comments on trail commission may not ring completely true.

OK so you are saying we can trust the Pru as a WP provider? Why? Got crystal balls, have we? Or maybe a special relationship that guarantees no harm will come to a Pru client over a typical 25 year policy term? Do the board all attend your Church regularly or something?

You are saying no-one is saying it, but I am. I am saying that no WP fund is safe to invest in, not least because even someone like you does not understand how it is run and more to the point how it will be run.

So, nevertheless, you seem to be saying that some are safe - that's what worries me. You say it without being able to make any guarantee whatsoever and in the full knowledge that those controlling the companies are far from being the saints they need to be to be left in charge of the billions sitting in totally opaque WP funds without dipping their snouts into it.

I don't know more than others but I do know and write enough to be dangerous apparently.

Sobeit. Punters be warned. WP is deliberately shifting sands wherever you find it.

dunstonh

What the FCA has to say about trail commission means your comments on trail commission may not ring completely true.

Where exactly does it say that endowments pay trail commission?

OK so you are saying we can trust the Pru as a WP provider? Why? Got crystal balls, have we? Or maybe a special relationship that guarantees no harm will come to a Pru client over a typical 25 year policy term? Do the board all attend your Church regularly or something

Why dont you tell us why you believe the Pru WP fund is not viable?

You are saying no-one is saying it, but I am. I am saying that no WP fund is safe to invest in, not least because even someone like you does not understand how it is run and more to the point how it will be run.

That is just irresponsible and silly. I really hope that anyone reading your posts does not take you seriously. It would be really sad if someone moved away from their WP fund with a guaranteed minimum maturity value and GAR because some irresponsible posting on the internet by you.

So, nevertheless, you seem to be saying that some are safe - that's what worries me. You say it without being able to make any guarantee whatsoever and in the full knowledge that those controlling the companies are far from being the saints they need to be to be left in charge of the billions sitting in totally opaque WP funds without dipping their snouts into it.

I'm pleased it worries you as it confirms your lack of knowledge and understanding and hopefully others reading will see that and take your comments with a pinch of salt.

I don't know more than others but I do know and write enough to be dangerous apparently.

You are dangerous if some poor sod decides to act on your misguided an inaccurate statements.

agarnett

Why don't you be useful and tell us examples of how the same WP funds have ended up being used as huge single repositories for punters' funds invested via a whole spectrum of different WP products originally sold even by different companies! You are splitting hairs between the different product types, off on the commission tangent, but they're all WP. That's the single characteristic now that makes them so attractive to those who know they can get away with manipulating funds like that anonymously behind closed doors. They had their fill of the ridiculous advance commissions from selling the damned products originally, but not content with that, they now want to rifle through what remained of the policy premiums ostensibly invested under their care and skilled management, and to constantly argue that enormous chunks of that remainder are also not the policyholders' funds, but theirs to do with as they scheme new justifications, abusing the justice system and laws of the land.

There's no hair betwen the different monies when they are sloshing around in the same fund with but a virtual barrier between them, created and constantly moving to suit the providers' own accounting and funding and frankly, bale out needs.

You are splitting hairs again based on the fact the FCA webpage mentions "WP bonds". What even is a WP bond? Don't even answer that. It's irrelevant. That word bond has been used for so many product concepts in financial services that it is actually worthless as a description of anything presented to a customer to read.

What is for certain is that whatever WP bonds are, the funds put into them have been mixed with endowment WP funds and pension WP funds, and probably churned up more times than the dough before it became your daily bread.

Why don't you tell us exactly why the Pru WP fund you are thinking of is worth special attention and how the management of that particular fund is safeguarded from adverse changes at the whim of the Prudential board?

Tell us exactly why you have said it is irresponsible of me to say to a general audience of punters that no WP fund is safe (because they'll never understand it or the motives of those selling it and responsible for managing it)? Surely it is by far the safest thing for any of us to say on MSE about WP?

Would it also be irresponsible now for me to also say stay away from all PPI for similar reasons?

Like many current market practitioners lauding the status quo, I remember that you wouldn't accept the latter assertion until you were smacked in the face one morning having woke up to discover the banks had completely caved in, and backed by dictates from the Ombudsman, and a heavy hint from FSA to the banks, the PPI Claim flood gates were finally opened. I recall you still were arguing here against it months afterwards. How was that in the interest of punters?

Punters like the OP do not realise that the same general very opaque WP investment concept that was at the heart of Endowment misselling scandal is at the heart of the WP Pension investment he is considering.

To get a flavour of what the Treasury Select Committee as long ago as 2008 thought of the way the likes of AXA, Aviva and Prudential were running their WP funds, just have a good read of their lengthy report into Inherited Estates i.e. the billions sloshing around in the WP funds which the providers could not help eyeing and then corralling for their own shareholders (and even using to prop up their own staff pension scheme as I already mentioned in this thread). On a similar disgraceful note, they all even paid, and still do pay, misselling costs from it!

Those funds were supposed to support "smoothing" of annual reversionary bonuses which were always the prime characteristic of WP which was THE most cautious investment for the ordinary punter next to National Savings and Premium Bonds originally. Reversionary bonuses were added annually and could ever be removed once added. What's happened to those, eh? Investments go down as well as up, right? Not WP originally. WP couldn't go down to suit the whims of the providers for a start. So they got rid of reversionaries and introduced something they could manipulate instead, didn't they? And they intoduced MVR's too. Where were the MVR's originally to be found via Ctrl-F when scanning the full wordings of original WP contracts? Nowhere to be seen. Dreamed up is what they were, like everything else now to do with WP.

For those not familiar with how to word search easily in an enormous 229 page PDF, or in more or less any other webpage or document on a Microsoft Windows computer, simply use Ctrl-F for "Find" (hold down the Ctrl key and tap F) and search for words like "Prudential" and "With Profits" and "reattribution" and "reasonable expectation" and "staff pension scheme"

The truth will out, dunstonh.

agarnett

And yes, you do make an important point about punters already embroiled in WP getting the wrong end of this stick (which is about staying away from new WP products) and taking it without further very detailed enquiry that they must get out fast from existing products.

So why don't you again be useful and point out how to get out of WP safely, if that's the best thing where there is for example:

• no further chance of "special distributions" of inherited estate, and
• no Guaranteed Annuity Rate promise worth the salt?

There are so few individual companies now running the previously sold policies containing hidden easily lost gems (so easily lost that even the providers often conveniently forget about them at maturity time). Never have so few controlling City spivs owed so much to so many trusting punters who bought WP as if Churchill himself recommended it (and probably did!).

• Who are these big companies controlling billions of the WP stuff ?
• Which are the names of specific WP products most likely to contain the gems?
• Which are the WP dogs to get out of at best terms?
• What deliberate market naming obfuscations are there to watch out for e.g. Pearl and Friends and Phoenix and Resolution which are just four names that have been deliberately re-used such that there are now completely unrelated products under different corporate umbrellas that have the same familiar name but completely unfamiliar owners?