Endowment Policy Value

Paddyo

Hi

Dont know if Im being screwed or not - so can someone please help.

I have an endowment policy - for the last 11 years - used to be attached to a mortgage but is now just a savings policy.

It is supposed to have a protection so that there can be no negative growth - the least is 0%.

Last year at 1st Dec 2002 it had a value of Eur9862
This year as at 28-11 it has a value of Eur9517

My payments are small Eur78 per month - total for year Eur936
I know that there are admin and life assurance costs that need to be taken out.

Can anyone explain why the fund might have dropped by approx 350, even before the payments for the last year are added?

If you need more info please ask.

Thanks in advance

Paddyo

spongebob

Maybe it is sterling based. On the face of it it looks dodgy.

You may contest the valuation through the Irish Financial sector regulator but must escalate with your own bank first. If they do not provide a satisfactory explanation you can go to the regulator and appeal.

No less than 0% should be a simple guarantee, don't worry about the small print as the regulator often ignores it.

M

Paddyo

Thanks for the reply Muck.

I wish it was sterling - but it is Euro

They have been in touch with me again - with the following:

The 0% guaranatee relates to the unit purchase price - the unit price cannot go below the purchase price - and this he said may be the reason - I coulndt understand his reasoning.

He also said the the value of the fund he gave me may not be the true value because of the adjustments that may have to be done due to the 0% guarantee. I asked him for the 'real value'. He did not know how to get it!!

The fund is supposed to have achieved -.03% for the last year. That does not reconcile with losing roughly Eur950 out of Eur9800 + my payments for the last year.

I have told him that I am not happy and that I want a real reason for the drop, not a maybe. He has gone to do some more checking.

Paddyo

Victor

I have a pension with Irish Life and have found them to be utterly incapable of creating transparency in their fund values.

The 100% capital guarantee may not be guaranteed agaisnt fees.

spongebob

Endowments are not sold any more because of all they sh1tehawking th ebanks did with them.

Ask for a full breakdown of appreciation before fees

Then ask who got what fee at what stage during thepast year, fund manager, bank manager , dolly the sheep , anybody witha finger in the pie. I mentioned Dolly because she has more intelligence and certainly more integrity than some of the vermin that work in the banking and life assurance sector.

What di they all (including Dolly) do to earn those fees, the past year has seen appreciation in savings , stock markets and property. How did your lot lose money?

How can you have purchased a UNIT back then, surely you purchase a unit every month ? Otherwise they were lending you your savings, does not compute.

Does the institution manage the fund itself or have they offloaded it onto fund managers who make a complete balls of it, that is good grounds for serious (relatively) compo from the regulator IMO . The financial institution is abrogating their direct responsibility towards you by not surpervising the vermin.

Name the bastids once you get the answers to the above

M

jd

Originally posted by Paddyo
Hi

Dont know if Im being screwed or not - so can someone please help.

I have an endowment policy - for the last 11 years - used to be attached to a mortgage but is now just a savings policy.

It is supposed to have a protection so that there can be no negative growth - the least is 0%.

Last year at 1st Dec 2002 it had a value of Eur9862
This year as at 28-11 it has a value of Eur9517

My payments are small Eur78 per month - total for year Eur936
I know that there are admin and life assurance costs that need to be taken out.

Can anyone explain why the fund might have dropped by approx 350, even before the payments for the last year are added?

If you need more info please ask.

Thanks in advance

Paddyo

Were your payments always Eur936 a year.
I think the guarantee is for the total amount invested-ehg if you had contributed 900 a year for 11 years 9900 would be guaranteed.
Even if after 10 years, the 9000 you invetsed was worth 10,500, you are not guranteed 10,500+ 900 =11400 after 11 years-you are just gurantedd the 9900
jd

ur mentor

there is always problems with values of endowments. They always have excuses.
If guarantee relates to purchase price then overall value may drop.
For eg if you buy 100 units in 1995 at 50p per unit.
then you come to 2002 and unit prices have gone up to say 70 and you buy some more. now value given at end of last year could be on basis of the entire number of units at the price then. If unit value isnow 65 the overall value can fall without breaking into the guarantee part. However value should not fall less than amount you paid in (this may exclude commissions- up tp 85% in year 1!)
Try not to get pushed around, these guys are either really well trained sales people or genuinely do not understand how these things work. Keep on insisting for answers and try to get them in writing they may put more effort into these and at least you can then post on board for us to critique!
Equally do not overly freak out at values. The stock market has been pretty poor lately. I have been buying shares steadily because I believe they will go up and they are now cheap. I regard it like going to supermarket. Every year price of food goes up and I buy when there is a sale. Same for shares every year (on average) they go up and there has been a 14 month sale on. If I'm wrong of course I'll be short on pints.:D

De Rebel

Originally posted by Victor
I have a pension with Irish Life and have found them to be utterly incapable of creating transparency in their fund values.

They are utterly incapable, period.

Everything they touch appears to go awry, including, in my experience, something as simple as a direct debit adjustment.

Try this some time... Most of their stuff works on the basis of units. You buy units, you accumulate units, you sell units. Try asking them for a detailed list, by contribution, of the number of units purchased and the unit purchase price. Then ask them to reconcile that back to the last valuation statement. I guarantee you will fill an A4 binder with the resulting correspondence.

slave1

If you were to say it was managed by KBC asset management, then that would explain everything, shower of tosspots IMHO
I agree with all previous posts, these guys just don't know what they're talking about/haven't got the intelligence to undertstand what they're talking about

Cash the fu*ker in and go for AVC/PRSA before the end of the tax year, I put in €2k last month and only cost me $1k cause I paid $1k less tax, unfortunately I am stuck with KBC, but at least I feel better for paying less tax

Paddyo

Thank you for all of the replies.

The company is Irish Life. I need to find out who is managing the fund.

Last year I did insist on getting a breakdown of the fees, life premium, commission etc. which they duly sent me, the totals for the policy to date as of last year.

They also sent me a year by year listing of the contributions I had made which was a complete waste of their time. It looks lovely all listed out like that, but all it showed was that I had paid Eur78.00 every month since I took out the policy.

I am still waiting for my 'personal manager' to get back to me with info. I will post a message when he once again tries to fob me off with vagueness.

Paddyo

Paddyo

One other question please.

If I ask for the detailed information as outlined by previous posters, shsould I be charged for it.

Thanks

Paddyo

De Rebel

Originally posted by Paddyo
If I ask for the detailed information as outlined by previous posters, shsould I be charged for it.

in a word, NO

and if they try it, let us ALL know

Paddyo

Well, another phone call from my 'personal manager'.

He came back with 'great' information.

My fund value on 1-11-2002 was 8802.75
My fund value on 1-11-2003 was 9207.07
My fund value on 28-11-03 was 9517.18

And so he said that it was increasing year on year and he seemed quite chuffed.

So I asked him how I had received a fund valuation of 9862.60 as of 1-12-2002
I have this in writing and in an email from them!!

I have sent him this email and am awaiting further phone calls.

This again might sound like a silly question but here goes----
If they are calculating the value of a fund retrospectively, do they apply exactly the same rules each time they do it? i.e. is it possible for them to come up with different figures each time?

Thanks for all the input

Paddyo

spongebob

Irish Life have a UK office , north of London somewhere like Luton.

If your policy is managed by that shower of sleevens then your complaint is with the UK regulator who have a HUGE file on Irish Life and have no qualms about forcing Irish Life to make restitution. Irish Life had a highly disreputable sales channel for their UK products (generally aimed at self employed and construction personnel) and especially in the latter half of the 1980's into the early 1990's .

If your complaint is with the Irish regulator then I'd advise you to get in early.

Demand all the information that was suggested, down to the granular level of a unit and its history, you are probably paying double fees.

1. Fee to Irish Life for managing your endownment (read as ripping off)
2. Fee to the fund who sell units to Irish Life , bought with your money.

Do not trust them, demand that one of their actuaries check and verify the information you are being given. Do not accept the data from a 'personal manager' .....droid.

As the fund has droped below the guaranteed amount you are now permitted to demand any information you wish and they must answer this 'reasonable request' in writing with a full explanation of what happened to all your funds from day one.

M

De Rebel

Originally posted by Paddyo
He came back with 'great' information.

My fund value on 1-11-2002 was 8802.75
My fund value on 1-11-2003 was 9207.07
My fund value on 28-11-03 was 9517.18

And so he said that it was increasing year on year and he seemed quite chuffed.

So I asked him how I had received a fund valuation of 9862.60 as of 1-12-2002
I have this in writing and in an email from them!!

That is so typical.

What you need is a contribution by contribution audit trail. Showing for each contribution, the amount you handed over, their various fees, charges, etc, etc, the unit ptice ruling on the purchase day, the number of units purchased. You will also see lines in this audit trail where they show the number of units forfit from time to time as part of te charging structure. Then, the final number of units, by the unit price on the final valuation day, will give you the current fund value. This is the only way you can be certain that there have not been any erors in the calculation.

like I said previously, expect to fill an A4 binder with mistakes before you have that.

It never ceases to amaze me that Irish Life do not show the number of units ANYWHERE on their customer facing documentation, despite the fact that the number of units is of paramount importance in valuing the fund and ensuring accountability. Now if only some Government would put in place Financial Services Regulatory Authority for Ireland. Oh, did I miss something......

Paddyo

Hi Again

I think I have discovered where the problem lies.

I have looked over once again the information they sent me last year. I think the valuation as of 1-12-2002 was overstated by €1000.00. I can only put this down to a typo on the behalf of Irish Life.

The rest of the information I have would then make sense.

I havn't told them yet - I want to see what they come back with

Paddyo