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With profits air raid warning RED

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With profits air raid warning RED

Old 22nd Jul 2011, 12:30
  #1 (permalink)  
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Join Date: Jul 2005
Location: UK
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With profits air raid warning RED

Hi, Well Clerical Medical have come up with a final warning to say that great scheme many of signed up to at IOT in the late 80's 90's is crock and down upto 40ish %. The RAF invited these guys in and must have some responsibility for endorsing a pants scheme. I recall they did invite other folks into BFT groundschool as well. Selling life assurance to single 20 year olds shocking really.
Does any one know a plan to maximise our meagre returns or is it too late?
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Old 22nd Jul 2011, 12:53
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Join Date: May 2007
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Caveat Emptor

I bought into a Friends' Provident policy at BFT too. Sold it a few years ago as it was doing so badly.

However, I bought it in the full knowledge that the returns were not guaranteed and that there were risks involved. I don't blame the RAF for bringing in a financial advisor and for me choosing to take the advice. It was a choice.

So unless you feel you were mis-sold (in which case there are already processes in place through your provider), I really don't think you have a case against the RAF.
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Old 22nd Jul 2011, 13:04
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Join Date: Jun 2009
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However (and apologies for slight thread drift) claiming for mis-sold Payment Protection Insurance does work (and you don't need to use the bandits masquerading as lawyers that advertise on TV). Just claimed in respect of an Egg card my wife had some years back, with which she was inertia-sold PPI, but they would not repay until recent banks lost the recent court case. Just got back 400 odd premiums and a couple of hundred in interest - all for two letters and an e-mail. In her case, in addition to being inertial sold the policy, she was self-employed so was not covered by PPI anyway. For most service personnel PPI is inappropriate as well, unless ecxpecting to get made redundant or pop their clogs early!
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Old 22nd Jul 2011, 13:27
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Join Date: Dec 2004
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The answer?


Can I please recommend a book for you to read that will help you make decisions on what's good and what's not for investing. I stumbled across it in an airport departure lounge and thank my lucky stars I did before I was literally thousands of pounds out of pocket.

I hope this helps as much as it helped me.


Pillaged! How They Are Looting 413 Million a Day from Your Savings and Pensions: Amazon.co.uk: David Craig: Books Pillaged! How They Are Looting 413 Million a Day from Your Savings and Pensions: Amazon.co.uk: David Craig: Books
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Old 22nd Jul 2011, 13:50
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One problem is the policies are sold with two projected maturity rates. The last policy I did not buy had, IIRC, rates of 7% and 11%.

I asked for examples of 3% and 5% and was told they were only allowed to quote the rates approved by the FSA. The FSA fixed rates were supposed to stop the sale of magic potions or silver bullets but had the effect of stopping you getting the epsom salts plan.

Now any one want advice on how to get 8% returns with medium risk?

Become your own advisor and do you own reasearch.
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Old 22nd Jul 2011, 20:30
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Join Date: Aug 2006
Location: West Sussex
Age: 78
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At the end of the 1960's (you there boy, stop sniggering!) the Boss invited some chap along to discuss "The Dover Plan" from Investors Overseas Services (owned by Bernie Cornfeld):-
Bernard Cornfeld - Wikipedia, the free encyclopedia
All the graphs went to the top RH corner, constrained only by the poster paper on which it was printed. It was a wonderful sure-fire get-rich scheme that couldn't fail. I should have gone for it, but personal fiscal restraints combined with all too typical lethargy militated against it and the apply by date came and went. Surprisingly the fund performance did not quite match expectations, indeed it more closely matched that of a Ju87 hitting its target along with its bomb. Surprising, because Bernie personally invested much of the money himself from his mansion near Geneva, mostly on wine women and song.
In that respect the plan was somewhat redundant, as most of us did the same thing anyway, and didn't need a middleman's help!
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Old 22nd Jul 2011, 20:49
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And how many of us thought Equitable Life was the best thing since sliced bread...
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Old 22nd Jul 2011, 21:28
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Join Date: Mar 2011
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Warning your investment may go up as well as down. Past performance is no guide to actual positive returns in the future. ...

get real and stop whining , I signed up too the above,, I have fingers crossed for an 25 yr endowment due 2013 but hay , the above still applies . Some people want it just there way eh.............. real world dreamers.........................
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Old 23rd Jul 2011, 08:06
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I bought a Friends Provident policy at Valley in the early nineties under the "We'll all live like Kings" sales pitch which highlighted huge POTENTIAL bonus figures. It hasn't performed so I got rid, swapped that part of my mortgage to repayment and took it on the chin. My IFA has advised me that I should formally complain to the Financial Ombudsman that I was mis-sold the policy; not that I wasn't aware of the risk. He states that, because I was single and living in the Offs Mess at the time, I had no need for a mortgage endowment policy. Indeed, I didn't get my first mortgage until three years later. Anyone gone down this avenue or reckon there's any mileage in it? Thanks,

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Old 23rd Jul 2011, 08:27
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One or two asumptions - you are in your 40s and a Higher Rate tax payer. Please don't take any of this as advice, but maintaining a poorly performing endowment is like throwing good money after bad - in principle, anyway. It gives you life insurance, sure, but does it fit in with your expectations, your objectives and does it fit in with your circumstances? Possibly not. So why have you still got it? If the maturity value or surrender value is below par, the chances are, its not going to suddenly turn around, but we adopt pressonitus, because we would rather get divorced than change our banks or make big financial decisions.

If it isn't covering anything, or if you can cover a mortgage commitment in other ways, have you considered cashing it in, taking the hit, but then putting the lump sum into a personal pension, invested in funds and with a strategy which match your current attitude and capacity for risk? You would get an uplift of 40% (tax relief as a Higher Rate taxpayer, and which would mitigate the loss of 40% that you have sustained) and any investment growth on top, although you couldn't touch it (currently) until aged 55. Make sure too, that you don't breach your annual pensions contribution limit and don't select a pup of a pension. If you need liquidity, consider an ISA. But you'll be swallowing the loss whole. You'll also be exposed possibly, with life insurance. These days, some people need an Offshore Bond too. The state is looking at ways of slamming down on tax reliefs and it can work efficiently and well if you require income.

The RAF has tightened up considerably on allowing Financial Sector exposure to servicemen and women. I do some presentations, but they are completely unbiased and impartial (I work as a volunteer for the Money Advice Service - an offshoot of the FSA) and people these days, are far better informed. Sensibly, people in the 20s are considering retirement planning properly. Reduced faith in a mil career, an uncertain AFPS future and more flexible work patterns mean that someone setting an element of their income aside now, has a greater chance of hitting income in retirement goals at 55, than waiting until their 30s and 40s. It means they can adopt a far more leisurely, far lower risk strategy which might hit the objective at, say, 48, instead of sweating it out right down to the wire, at 55 or 60. The money can then be freed to enjoy life with a partner or getting the kids through Uni. A personal pension does not offer you a guarantee, but there is no such thing in life as a guarantee. It offers you the potential for good growth, tax relief and incredible flexibility (new pension Regs mean that if you hit a certain target for secure income, ie; via AFPS, a personal pension can be 'plundered' in a far quicker way at 55 too). Make sure any non income earning partner has considered getting one too!

With regards to life insurance for 20 year olds, it can be suitable. Many 20 year olds don't have dependents in the literal sense, but getting life insurance early on and during initial training, before you have notice to deploy anywhere, before you start getting a bulging medical file, when you are young can have a massive effect on lowering your premiums, which will pay off quite quickly. But did you need life cover with an endowment? No, probably not - especially if you didn't even have a mortgage! There are a few life insurance companies out there who do no not increase the premium for RAF fliers (some, anyway) and RAF pers in general. They will load or 'rate' though, army personnel, but you do have to ferret them out or get someone to do it for you, and sometimes, you have to strike whilst the iron is hot.

Also, some younger clients have dependent parents, or siblings who are their nominated beneficiaries. When kids come along, and when you DO need cover, its usually the last thing on your mind and certainly not as high on the budget radar as nappies. Of much more importance though, is Critical Illness Cover and Flying pay Insurance. CIC is now a well priced and detailed product and a sensible option to consider for anyone starting out on a potentially well paid career and who might not have dependents to worry about, or have financial support in civvy street; after all, when you're dead you don't needto buy fuel or food, but when you're crippled and discharged, you still do. Flying pay protection can be had for 15+ a month and provides ongoing income.

edit: Please don't take any of that as advice; go and see someone you trust to advise you or make your own call. If you would like to pass me details of the policy by PM, I'll tell you how it sits in the grand scheme of things and compared to other policies - some are performing far worse than others. I understand where you're coming from though; I'm now an IFA, dealing with RAF clients, and I was sold a couple of rubbish policies too, at AKR in 1987.. but I cashed them in years ago. Please don't hesitate to contact me if you need an information based steer.

Last edited by Al R; 23rd Jul 2011 at 12:48.
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Old 23rd Jul 2011, 09:41
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OTOH, I got diddly squat because I did not get a mortgage until 10 years after.
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Old 23rd Jul 2011, 12:42
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R Scandal,

You can't complain simply because it has lost money, but you can if you were mislead.

Guide to mis-selling of endowments | This is Money
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Old 23rd Jul 2011, 13:30
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Join Date: Jan 2008
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The RAF has tightened up considerably on allowing Financial Sector exposure to servicemen and women.
Does this mean the rank amateur brigade have stopped getting compulsory access to new recruits (of all ranks) in the first week of their recruit training?

Be your own advisor and do you own research.
What he said....although part of that research nowadays is to read all AL R posts coz the man he know his stuff.
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Old 23rd Jul 2011, 18:02
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Maybe I am alone here but I am happy with my endowment that I bought.

I bought a 25 year endowment 5 years before I got a mortgage. But that meant when I did get the mortgage, I only had the mortgage for 20 years as I was already 5 years into the endowment.

It was for 30k with a projected maturity of 44k. Matured in March this year for 31k. As I had paid in some 14k, and it paid off over half of the original mortgage (since extended) off, I am happy enough with that.
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Old 23rd Jul 2011, 18:40
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Join Date: Sep 2006
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I took out an Endowment mortgage 25 years ago. interest rates were high and so I expected a big lump sum on maturity. However, as interest rates dropped then my endowment was less "secure": however, my mortgage payments to the building society also reduced significantly so I paid the money saved on the interest payments directly into the mortgage (my BS were happy with this).

The result was that although the endowment did not reach the planned level, the total owed on the mortgage had reduced considerably and I made a small "profit" when the endowment matured and the mortgage paid.

Moral of the story... Low interest rates worked both ways. By paying out the same each month (even after interest rates dropped) the mortgage remained secure.
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