endowment policy ... PICKING UP ????

pjala

dunstonh wrote:

.... So, these companies will have to recover their losses before they can increase bonuses again. Some of them will take 15-20 years to recover. So dont expect any bonuses on those again (or minimal at best).

If you are with one of the stronger financial services companies and understand the risk involved with investing, then yes, it is probable that returns will continue to improve. Pru and NU are the two strongest WP providers.

I'm with Friends Provident at the moment. I think they used to be ok before they demutualised - but my question is, are they a strong provider, or a company that will take 15 to 20 years to recover?
Thanks.

EdInvestor

Actually if they hadn't demutualised they would have been in really deep trouble.They did it in the nick of time. They are not a strong provider and will probably not be players in With profits for much longer.

Which is not to say they aren't a perfectly OK company in other areas, particularly fund management, where their associate company F&C is now a big player.

It's unlikely that there will be many companies bothering with WP (apart from the Pru and maybe Norwich Union) in future. I'd expect Standard Life to move on to the new era after the DM. NU is already talking about distributing its orphan assets...

jnd

trademark wrote:

jnd ..... yes i did ...and ive just received 2 more ....... for 2 of the 3 policys i own .

im lucky in that it seems they are seriously improving , i got some compensation and i do not really need the money to settle my mortgage in 9 years time

any advice then please feel free to ask

Thanks for the info. The reason I asked was I've had my endowment, originally Scot Am Home Purchaser, for 13 years and I've never had anything other than a green letter. Just curious if you got compensation for claiming it was mis-sold even though it was still paying out.

Sorry if this sounds selfish/stupid but is it possible for me to claim the policy was mis-sold on the basis that it isn't going to return the profit i was expecting/promised by the financial advisor or do you always have to wait for an amber/red letter before you can do anything?

carnet

dunstonh wrote:

MVRs only tend to be mentioned when you ask for surrender. Its the current values that have been increasing. (although MVRs have been going down as well)

Well, RL provide a "Value" every 6 months. They also provide a unit price and the number of units held.

Its just a simple matter of of multiplying the no. of units by the unit price and comparing the result with the "value" quoted.

If the former is higher than the latter, the difference is the MVR.

dunstonh

Just curious if you got compensation for claiming it was mis-sold even though it was still paying

The compensation puts you in the position you would have been if you had been on a repayment mortgage (in simple terms, a difference between required value and surrender value). A "green" endowment would pay out more than that required amount and give you no compensation.

Indeed, it shouldnt really be called compensation as it isn't. Its more of a correction.

trademark

jnd , dunstonh is quite correct ....... ive not been compensated for my ifa's promises or mis-advice .

when i took out my policy 1989 i was 21 my wife 18 .... we were blinded with incorrect projections and were never told we were gambling our future home ... also and more importantly we were in rented accomodation at the time ... the fsa does not like this and nearly always rule in your favour as you may never buy a house .

my case was still touch and go as my ifa claimed that i was sold the policies primarily as life cover as i didnt have any ... what he forgot was that he had sold us two life policies on the same day as the first endowment policy ..... case closed as they say

he sat there in our house and said "if you dont get between 120k-140k in 2014 (with 3 policies) then ill eat my hat"

projected forcast 2 years ago was 52k on 3 units ech of £25k total 75k .. a 23k shortfall

hes not my ifa anymore of course and also no longer in business due to the amount of claims brought against him .

so id claim regardless , i dont understand why you are getting green letters and mine are red though as one of my policy's is also 13 years old .....

dunstonh

so id claim regardless , i dont understand why you are getting green letters and mine are red though as one of my policy's is also 13 years old .....

When the endowment is set up, the person doing it has the opportunity to select the target growth rate. The premium is then set based on the plan achieving that target growth rate average over the term. The lower the target growth rate, the lower the endowment investment risk involved and the more likely the endowment is to hit target.

In addition, there is a wide range of investment areas and many investment funds are doing ok. Just as many are not. There are a large number of endowments above track. You just dont hear about them as people dont complain about them.

I don't see how complaining would do you any good. You would fill in questionnaires and wait many months and regardless of the outcome, you wouldnt get any pay out.

trademark

"You would fill in questionnaires and wait many months and regardless of the outcome, you wouldnt get any pay out".



yes was not thinking ..... because as mentioned any payout is to place you back into the position you would have been in had you taken a repayment mortgage , because a persons endowment is on track or ahead of itself this will mean they are already in that position or better off .

jnd

Trademark and Dunstonh,

Thank you both for the explanations. I guess I can count my lucky stars then.... When I took out the endowment policy I was 22 and still lived at home with my parents. I didn't actually buy a home until a few months after the endowment was up and running. I remember being shown projections that the £40k endowment could be worth up to something like £120k in 2017. My target growth rate was set at 6%.

Cheers.

pjala

Editor wrote:

Actually if they hadn't demutualised they would have been in really deep trouble.They did it in the nick of time. They are not a strong provider and will probably not be players in With profits for much longer.

Which is not to say they aren't a perfectly OK company in other areas, particularly fund management, where their associate company F&C is now a big player.

It's unlikely that there will be many companies bothering with WP (apart from the Pru and maybe Norwich Union) in future. I'd expect Standard Life to move on to the new era after the DM. NU is already talking about distributing its orphan assets...

So sell it back to them, take the money and dont bother with it any more? It seems to be a bottomless pit at the moment.