Private Pensions

One for the Financial Guy's.

Am I right in the assumption that bonus statements in endowment policies that are added annually are set, i.e. they do not fluctuate. Each year another sum is added and the total is increased. You then get a terminal bonus at the end.

So what you get is,

Fund value (based on performance)
Acrued bonus's
Terminal Bonus

Is that right?

Regards

Milan

quote:

One thing I don't understand about IFA's.

If they think their advice is so good, why don't they get a percentage over time, so the better the investment performs, the more we both make out of it? IE money where mouth is.

AFAICT, it is in the interest of the IFA to sell me whichever product pays the highest commission, which then reduces the pot of money to be invested.

Ah, but would some then be more likely to simply recommend stable funds (i.e. ones that won't ever go down much, if at all) rather than utilising experience and doing any work to research the more dynamic funds that may earn the investor (and thereby themselves) more in the long run but are bouncy along the way..?

In practice an IFA, like any professional, stands or falls by their own standards. Funny how the more people appreciate the advice they've had, the more likely they return to that person for advice next time. So, do a good job and your earnings rise, which is what I think you're advocating. If clients think they've been screwed, they don't go back. Just like any business/industry (as I keep hinting) in fact.

quote:

Originally posted by Tarquin Maynard-Portly:

quote:

Originally posted by Tarquin Maynard-Portly:
I have made no offer.

Can you tell us the outstanding term on the endowment, how long you have had it, and the value at the date you received the £30k?

M

Hi Joe

Any news?

M

I can't find the bloomin' paperwork (in the middle of a major redecoration at the moment) so am relying on memory, but the rough figures are:

Policy taken out 1992, due to mature 2017 (so around 10 years still to run). It was supposed to pay out £75,000 on maturity, but I was advised periodically from 2003 onwards that the policy would fall short of this by an increasingly large amount (up to £35k according to the most recent projection).

Being the nervous type I decided to surrender the policy and switch to a capital & interest mortgage, rather than wait till the policy matured. I got back around £30k, which I calculate to be about what I paid in.

No doubt that was a dumb thing to do, but I'm risk-averse by nature and prefer the security of knowing my mortgage will actually be paid off before I retire.