The Endowment Diary

The Endowment Diary


The Endowment Mis-selling Debacle - one of the UK's worst financial scandals

Saturday, September 20, 2008

Adviser Claims Foul by Norwich Union

Adviser Claims Foul by Norwich Union

The FT reports that Dolly Pickering, of Heather, Moor & Edgecomb (an IFA), has claimed that Norwich Union's change in projection calculations has led to an endowment misselling claim being brought against it.

Ms Pickering was informed of a £6K drop in the value of a client's policy, caused by an improvement to the accuracy of estimated maturity value (EMV) calculations.

Ms Pickering stated that it was unfair that IFAs were being punished for selling endowment policies, whose initial projected values were inaccurate, and holds the providers responsible.

Monday, September 08, 2008

Norwich Union Cut Bonuses

Norwich Union Cut Bonuses

Norwich Union have delivered another blow to the tattered reputation of the life assurance industry, and its much derided and failed product of endowment policies.

Norwich have told their 2.4M with-profits policy fund holders that it will cut policies maturing this year by 11%, in comparison with those that matured last year.

The phrase "with-profits" sounds somewhat hollow does it not?

I wonder why it is that no one has tried to sue the life assurance industry for misrepresenting their product by using that phrase?

The theory of with-profits policies is that they are meant to smooth returns. However, given the ongoing cuts in these policies, that theory appears to be half baked. The life assuring companies have quite clearly mismanaged these policies.

The cuts made by Norwich Union are in line with the fall in the FTSE 100 index over the past 12 months, and that means that the "smoothing" has had no benefit or effect whatsoever.

The changes mean that payouts from Norwich's top-paying mortgage endowment fund dropped by 5%, or £2,144, overnight.

Those who hold these useless, mismanaged polices should take a class action against the life assurance industry for: