Cut old people's benefits, they'll die soon anyway

[Sticks.]

sidicks said:

Sticks. said:

I'm sure it did say that. And I'm sure the salesman would've said not to worry about it, because there hadn't been any reason too.

How much contact did you have with the salesman after the initial sale?

Ragular contact until he died 80 - 86 - it was my dad. Growing up in the war he'd never had dreamed of what seemed a golden opportunity financial security in retirement that this was, or seemed.

Not really relevant in my case as it wasn't a worry by then and I hadn't based borrowing on it. (the mortgage multplier is more the issue as far as I'm concerned).

[98elise]

Rovinghawk said:

What occurs to me is that endowments/house purchases & the whole situation involved with them is probably the biggest financial issue that anyone will ever get involved in. Based on that, surely the individual should accept their responsibility to learn a little about it so as to go in with a little bit of knowledge?

I'm no financial expert but before buying a house I made sure I had a pretty good grasp of how markets/endowments/financial products worked. This was gained by going to the local library & reading up on the subject- my understanding is that libraries were/are available to pretty much anyone.

Even those incapable of going to a library should be capable of reading the forms they signed. Those not capable of this shouldn't be allowed to get involved in financial transactions.

I believe that for every case of mis-selling (I accept that this happened on many occasions) there were at least ten cases of mis-buying.

What we did was seek professional help from a financial advisor.

It later turned out the were little more than salemen only making decent money when selling you a particular product. They didn't need to be qualified in any way, and they were not regulated.

I assume when you bought your house you also went to the library and brushed up your conveyancing skills so that you could check that your solicitor was doing his job properly? If not then perhaps you might want to be a little less self rightious.

[sidicks]

98elise said:

What we did was seek professional help from a financial advisor.

It later turned out the were little more than salemen only making decent money when selling you a particular product.

Did you pay a fee for advice?

98elise said:

[b]They didn't need to be qualified in any way, and they were not regulated.

Really....?

98elise said:

I assume when you bought your house you also went to the library and brushed up your conveyancing skills so that you could check that your solicitor was doing his job properly? If not then perhaps you might want to be a little less self rightious.

In what way did your advisor NOT do his job properly?

[Rovinghawk]

98elise said:

I assume when you bought your house you also went to the library and brushed up your conveyancing skills so that you could check that your solicitor was doing his job properly? If not then perhaps you might want to be a little less self rightious.

On one of the houses I received searches showing an incorrect layout of the drains. On another I found that the plans & the boundaries didn't match. On another I found that the flood risk report was wrong. I steered the conveyancer on these, so I think your point isn't particularly strong.

byw- I don't think of myself as self-righteous (note correct spelling). I just think people should take responsibility for their actions rather than always trying to apportion blame elsewhere.

(edited for typo)

Edited by Rovinghawk on Sunday 11th October 12:49

[98elise]

sidicks said:

98elise said:

What we did was seek professional help from a financial advisor.

It later turned out the were little more than salemen only making decent money when selling you a particular product.

Did you pay a fee for advice?

98elise said:

[b]They didn't need to be qualified in any way, and they were not regulated.

Really....?

98elise said:

I assume when you bought your house you also went to the library and brushed up your conveyancing skills so that you could check that your solicitor was doing his job properly? If not then perhaps you might want to be a little less self rightious.

In what way did your advisor NOT do his job properly?

Having discussed it with my Father first I went to see him wanting a repayment mortgage, he convinced me an endowment was better. There was no mention of risk in his sales patter.

Even when it started to go there was a guy in our office who was sold an endowment and he had no clue about the risks involved.

I didn't pay a fee, but I also don't pay a fee to my bank manager when I speak to him. If you wanted a mortgage this is how you did it. You spoke to a the in house broker (or 99% of people did).

Edited by 98elise on Sunday 11th October 12:40

[98elise]

Rovinghawk said:

98elise said:

I assume when you bought your house you also went to the library and brushed up your conveyancing skills so that you could check that your solicitor was doing his job properly? If not then perhaps you might want to be a little less self rightious.

On one of the houses & received searches showing an incorrect layout of the drains. On another I found that the plans & the boundaries didn't match. On another I found that the flood risk report was wrong. I steered the conveyancer on these, so I think your point isn't particularly strong.

byw- I don't think of myself as self-righteous (note correct spelling). I just think people should take responsibility for their actions rather than always trying to apportion blame elsewhere.

Oh the irony.

[Rovinghawk]

98elise said:

Oh the irony.

Since you appear to want a dispute I'll accomodate you:

You signed on the dotted line. You should have read what you signed & checked your facts rather than only taking in the bits you wanted to hear & blaming everyone else when it didn't go your way. As you didn't, tough titty.

[RYH64E]

sidicks said:

RYH64E said:

For those of us blessed with hindsight rather than foresight it's never easy to get the timing right...

It wasn't a criticism! Just supporting my previous comments to another poster that long-term investments have upside and downside risk and suggesting that the 'product' was wrong purely on the basis of hindsight suggests a fundamental lack of understanding about the investment markets.

It's a typical example of financial advisor speak, if you get out of an investment promptly you've sold too soon and would have seen the benefit of market rises had you sat tight, but if you did sit tight you've ignored clear warnings that the market was about to crash and it's your own stupid fault.

I have a firm policy in legal and medical matters, I pay for the best professional advice I can get and follow it to the letter, but when it comes to financial matters I find that professional advice is rarely worth a jot. I'm never quite sure if an advisor is trying to maximise my return or his own, at least if I do my own thing I've only got myself to blame if things go wrong.

[sidicks]

RYH64E said:

It's a typical example of financial advisor speak, if you get out of an investment promptly you've sold too soon and would have seen the benefit of market rises had you sat tight, but if you did sit tight you've ignored clear warnings that the market was about to crash and it's your own stupid fault.

Nothing to do with 'financial advisor' speak! Of course having the benefit of hindsight we might have made different decisions but you can only make decisions based on the information available at that time. For some people 'cutting their losses' would have been the right thing to do, for others 'hanging on to the end' would be the right decision at the time.

However, if you buy a 25 year product and sell it before maturity, you will get quite a different return than if you held it to the end, which means it's unreasonable to criticise the return achieved!

RYH64E said:

I have a firm policy in legal and medical matters, I pay for the best professional advice I can get and follow it to the letter, but when it comes to financial matters I find that professional advice is rarely worth a jot. I'm never quite sure if an advisor is trying to maximise my return or his own, at least if I do my own thing I've only got myself to blame if things go wrong.

Pay a fee for the advisor's time rather than take the cost of the advice out of the investment!

Edited by sidicks on Sunday 11th October 13:25

[sidicks]

98elise said:

Having discussed it with my Father first I went to see him wanting a repayment mortgage, he convinced me an endowment was better. There was no mention of risk in his sales patter.

Even when it started to go there was a guy in our office who was sold an endowment and he had no clue about the risks involved.

I didn't pay a fee, but I also don't pay a fee to my bank manager when I speak to him. If you wanted a mortgage this is how you did it. You spoke to a the in house broker (or 99% of people did).

In what way was the advice you received incorrect?

[thepeoplespal]

anonymous said:

[redacted]

I can remember my sister being advised to take out an endowment mortgage by The Halifax and my sister-in-law a Pep-mortgage, I told both to avoid endowment policies like the plague and take the more expensive repayment option. Both chose to take their mortgage advisors products as they were so called professionals, who knew what they were doing. I don't think it was greed, it was what everyone else was doing, it was what they were getting told and it was a 'safe' option.

I do tend to get listened to a bit more these days, but if anything with all the information it is even harder to make a good decision these days. I'd a gut feeling several years ago that Buy to Let was going to take a hammering, but I didn't know how, so I cautioned family to make the numbers work with worse case scenarios and ensuring affordability & while it hasn't stopped them, I think they have made better decisions and not leveraged everything near as much as they could have.

[98elise]

sidicks said:

98elise said:

Having discussed it with my Father first I went to see him wanting a repayment mortgage, he convinced me an endowment was better. There was no mention of risk in his sales patter.

Even when it started to go there was a guy in our office who was sold an endowment and he had no clue about the risks involved.

I didn't pay a fee, but I also don't pay a fee to my bank manager when I speak to him. If you wanted a mortgage this is how you did it. You spoke to a the in house broker (or 99% of people did).

In what way was the advice you received incorrect?

That an endowment was a better mortgage for me. I'm a pretty risk averse person, so add that to being pretty young at the time it was not something I should have been doing.

The pitch was convincing enough to make me go against my Fathers advice to get a repayment mortgage.

Once it all blew up I moved to a repayment mortgage and let the endowment run to its end. I chalked the shortfall up to a life lesson.

[sidicks]

thepeoplespal said:

I can remember my sister being advised to take out an endowment mortgage by The Halifax and my sister-in-law a Pep-mortgage, I told both to avoid endowment policies like the plague and take the more expensive repayment option. Both chose to take their mortgage advisors products as they were so called professionals, who knew what they were doing. I don't think it was greed, it was what everyone else was doing, it was what they were getting told and it was a 'safe' option.

I do tend to get listened to a bit more these days, but if anything with all the information it is even harder to make a good decision these days. I'd a gut feeling several years ago that Buy to Let was going to take a hammering, but I didn't know how, so I cautioned family to make the numbers work with worse case scenarios and ensuring affordability & while it hasn't stopped them, I think they have made better decisions and not leveraged everything near as much as they could have.

In the decade until the financial crash of 2008, over one third of mortgages were on an 'interest only' basis - where they all inappropriate for the customer?

[RYH64E]

sidicks said:

In the decade until the financial crash of 2008, over one third of mortgages were on an 'interest only' basis - where they all inappropriate for the customer?

I've only ever had interest only mortgages, the last just a few years ago, they suit me, but I haven't had an endowment since 1990ish. There's nothing wrong with interest only providing you're confident that you can pay the mortgage off somehow.

[sidicks]

RYH64E said:

I've only ever had interest only mortgages, the last just a few years ago, they suit me, but I haven't had an endowment since 1990ish. There's nothing wrong with interest only providing you're confident that you can pay the mortgage off somehow.

And what's the difference between using an endowment to pay off the mortgage and an ISA or other means?\

What investments are you holding and what are the risks?

[RYH64E]

sidicks said:

And what's the difference between using an endowment to pay off the mortgage and an ISA or other means?\

What investments are you holding and what are the risks?

In my case the difference was trusting advice from a professional adviser or doing my own thing. It's zero risk for me, I either pay of big lump sums as and when convenient, or if the worst comes to the worst I'll sell an unencumbered asset.

Same thing with pensions, back in the day I was advised that Equitable Life was the best going, since that turned sour I've never put a penny into a pension.

[sidicks]

RYH64E said:

In my case the difference was trusting advice from a professional adviser or doing my own thing. It's zero risk for me, I either pay of big lump sums as and when convenient, or if the worst comes to the worst I'll sell an unencumbered asset.

So next to no difference from an investment perspective?

[RYH64E]

sidicks said:

So next to no difference from an investment perspective?

Comletely different, not least because one repayment mechanism incurred substantial fees yet failed dismally, the other has cost nothing and done very well, one was outside of my control whereas the other is completely my responsibility.

[sidicks]

RYH64E said:

Comletely different, not least because one repayment mechanism incurred substantial fees yet failed dismally, the other has cost nothing and done very well, one was outside of my control whereas the other is completely my responsibility.

Your investment approach 'doesn't cost nothing'!

My point was in comparing the sort of investment vehicles that most people use to repay an interest only mortgage....

[V8 Fettler]

sidicks said:

V8 Fettler said:

The measure of appropriateness is to consider the current popularity of endowment policies as a means to repay mortgages.

Nonsense.

V8 Fettler said:

The financial sector clearly didn't understand the risks involved with endowment policies, hence the widespread failure of endowment policies sold 1980s onwards. If the "experts" can't understand the risks then what hope for the punters?

More lack of understanding from you as to what risk and uncertainty in investment markets actually mean. The experts certainly understand the risks, although in some cases they were not communicated adequately to the client.

V8 Fettler said:

Again, why the demonstrable widespread failure of endowment policies sold 1980s onwards? There is also the issue of existing policies ending up in zombie funds. Otherwise known as the "tough luck" funds.

Repeating the nonsense that, because (in some cases) investment performance was disappointing the advice was poor, simply betrays a lack of understanding. By the way, extra points for the nice use of terminology that you clearly don't understand...

V8 Fettler said:

I understand that financial advisers refuse to take responsibility for providing poor professional advice despite extracting a fee.

Ignorant strawman argument.

V8 Fettler said:

Perhaps the adviser should have ensured that the punter understood that the adviser was guessing when offering professional advice on financial products?

Ignorant strawman argument.

V8 Fettler said:

Again, this should be about professionals making professional judgements and taking responsibility in return for extracting a fee. If the financial adviser is not prepared to take this responsibility then they shouldn't be commenting on future performance in return for a fee i.e. change of career

They don't. HTH

V8 Fettler said:

If a financial adviser is not prepared to take responsibility for judging future performance (including an element of crystal ball gazing) then - again - they should not be commenting on future performance in return for a fee

They don't. HTH

V8 Fettler said:

It's unlikely that the electricity supply sector would have any responsibility for the condition of your table lamp and fuse, that's because you don't pay them to take professional responsibility for the condition of your table lamp and fuse. However, they do have a professional and contractual responsibility to ensure those electrons arrive at your house.

Again, your continued misunderstanding of the role of a financial advisor and the predictability of markets is a recurrent theme.

V8 Fettler said:

Simplistic = broad brush. Sub-prime = crap. ABS? Anti-lock braking system? Stomach muscles? If the major players had the required management skills and good intent then confidence could have been maintained, but it was easier to bail out.

Again, your understanding is based on tabloid headlines and not even a basic understanding of the markets.

V8 Fettler said:

Again, given the demonstrable widespread failure to perform, how could endowment policies be regarded as suitable? It therefore logically follows: how can the advice to buy these endowment policies 1980s onwards be good advice?

Logical fail, I'm afraid. Again you fail to understand the uncertainly of investment markets - something that appears to be a consistent theme with your posts.

V8 Fettler said:

Stop squirming. The "regulated professionals" failed in their professional responsibility to ensure that effective due diligence occurred. The results of that failure were catastrophic.

Once again you fail to understand who are 'regulated professionals' and who aren't. No change there.

V8 Fettler said:

My biggest "misunderstanding" was historically "misunderstanding" the level of competence and trustworthiness of a key element of the financial sector. My level of understanding has improved over the decades. Nothing personal you understand, I'm just a punter.

Your comments above would suggest your level of understanding still has a long way to go to be regarded as even 'adequate'.

You're still squirming and avoiding the issues, although you do offer sharp, slick one-liners with meaningless content. Have you trained as a financial adviser?

I can summarise our differing viewpoints in a couple of paras:

My view is that if a professional adviser provides professional advice for a fee then that advice should be good advice; if that advice is subsequently proven to be poor then the professional adviser (or his PI insurer) should take responsibility for the poor advice and risks / costs resulting from that poor advice, that's because he was paid for the professional advice. This describes the typical punter / professional adviser relationship outside of the financial sector.

Your view is that if a professional adviser provides professional advice for a fee, and if that advice is subsequently proven to be poor then the professional adviser can relinquish responsibility for the advice and expect the punter to be liable for the risks / costs resulting from the poor professional advice despite paying for the professional advice. Bizarre.