Endowments - the alternatives (General Comments)

Member Name: ordy

Product:	General Comments
Date:	06/11/00 (198 review reads)
Rating:

Advantages: Good for IFA's who earn huge commisions

Disadvantages: Dreadful things - avoid like the Plague

If you are being told by an IFA to buy an endowment you are almost certainly being misold a product in order to pay him a fat commission. Beware, as these things are expensive, inflexible and tend to be poor performers.

Instead look at buying a Shares ISA through a discount broker - there are many online now and the money websites such as iii are good places to start.

Typically you should be looking at companies such as Henderson, M&G, Jupiter. In particular I like the Henderson range of products - they have exceptional fund managers (I used to work there 3 years ago, so I know!).

Other alternatives include Virgin ISA's - tracker funds with very low charges. Here you get a pure stock market return which historically has been very good over hte long term (this year has been bad though!)

If you are risk averse then there is ABSOLUTELY NOTHING WRONG with a good old fashioned repayment mortgage, and don't let any IFA try and persuade you otherwise. And, in particular, flexible repayment mortgages can be very efficient for people with variable earnings!

UPDATE - OCTOBER 2001

Since I wrote this endowment returns have really started to suffer. Many with profits funds now are finding that they do not have the assets to back the liabilities and there is talk of exit penalties. I would not be surprised if in the new year this becomes the norm rather than the exception - world markets are in turmoil at the moment.

I am keeping as much as possible in cash!!!

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