Endowments - When Did It All Go Pear-Shaped?

In message , Robert writes

Some will claim that the cutoff date was 1984 (IIRC) when LI(T?)RAS was removed from new policies.

Had the stock market not suffered many of these problems would probably not have surfaced (or at least been significantly less) then the regulators are making the situation worse by forcing companies to descrease equity exposure to provide stability just as the market has started recovering, thus destroying the benefit of the pound cost averaging that the salesmen would have mentioned.

Or even 1971, when the first Low Cost With Profits Endowment appeared, which allowed the mortgage value (Sum Assured) to be based (in part) on the level of future bonuses.

Certainly endowments as a "bad idea" except for people wanting a flutter was widely talked about in the press in the late 1980s. Anyone who took an endowment after that date has only themselves to blame IMHO not their "financial advisor".

You can stick your HO back up from whence it came, thanks very much. Who are you to be making judgements on a situation you know nothing about?

Yes I agree. I remember telling a colleague that Endowments were "one of the few legal forms of robbery" and that he should avoid them. From a look at my CV I see that this was in 1991 (and I recall that I had been of that opinion for several years).

I had acquired this opinion by nothing more than reading the financial pages of the newspapers which were already saying how bad a deal they were. Anyone could have read this and formed the same opinion and I fail to see why people who didn't do so have a claim for compensation against anyone other than the individual who pocketed (aka stole) the commission.

tim

My dad advised me against an endowment in the late 80s/early 90s. (He had profited from one in the past, so wasn't against them in principle).

That said, financial advisers can not escape blame. It is unreasonable to expect to pay for advice and have to do your own research. In addition many people would have done some research and then persuaded by a slick sales talk (or simple lies) to go for the endowment.

Thom

I agree. Unfortunately, it is not them that the people asking for compensation are seeking the compensation from.

They are seeking it from the current holder of accounts with the *mutual* (or ex-mutual) company that sold them their policy as there is no-one else who is around to compensate them.

Fine, so they should sue the person who gave them that advice, and have their comission clawed back to pay it. They should not be asking for compensation to be paid from the policies of other (innocent) people who bought different policy types from other sales people at the same company.

tim

Don't ask questions on a public forum then - talk to your financial advisor instead.