about With Profits
What Are They?
With-Profits funds are most commonly found in three main policy types:
Pensions, Bonds and Endowments.
They consist of pooled funds paid by policyholders and invest in a mix of mainly equities, fixed interest and property. Each year a bonus is declared by the insurance company and a terminal bonus can also be paid when the policy matures. These With-Profits policies were meant to be relatively low risk by keeping money back from good years to help fund poorer years.
This is known as the smoothing effect. Unfortunately, many of these funds
have shown very poor performance in recent
years with some funds paying no bonus at all. This is despite the stock market
performing well for a number of years.
More than £160 billion is currently invested in 'closed funds'. This means
they no longer accept new money and do not have
an active investment strategy. The bonus rates paid are at the discretion of
the insurance company and this makes it very difficult
to know if they are being fair.
The Financial Services Authority (FSA) prefers contracts which are easier to understand and have a much clearer structure and they would like to see all these With-Profits policies reviewed under their 'treating customers fairly' guidelines.
Companies have built up huge amounts of surplus capital in the funds, known as 'orphan assets' and critics have accused them of using this money to boost returns to shareholders instead of benefitting policyholders.
Your money does not have to languish in low or even negative return investments in these types of With-Profits policies! We can assist you by thoroughly reviewing your current pension, bond or endowment made through With-Profits and advise the best possible course available to start them really earning for you!
Make An Online Enquiry Now!
WHAT SHOULD YOU DO?
Does your With-Profits policy still meet your needs in the same way that it did when you
took it out? Leaving your money invested in poorly
performing with profits funds could cost you thousands of pounds over a
period of time.
Equally, many companies now impose
an exit penalty known as a market value adjuster (MVA) if money is
transferred out of a fund. So deciding what is the best course
of action to take is not an easy matter.
Make An Online Enquiry Now!
The Solution!
We offer a review service which can help you. By using analysis tools we can provide advice on the best course of action to take with your With-Profits policy.
For an initial response please complete Our Online Enquiry Form.
We will
then contact you to obtain further information.
