Your perceptions aren't always reality. No lad driving around in a Golf R is kidding anyone that he is "wealthy".
Discussion about mis-selling of endowment mortgages in the 80s and 90s
- Thread starter Rroff
- Start date
Soldato
You know that, I know that. However do you think the lad in question knows that?
Of course not, otherwise why is he doing it?
Your tiny circle of friends does not represent the entirety of your age group, whatever that may be
Financially illiterate nation. Pretty sure 90% of the population see 'The value of your investment can go up as well as down' as a proviso that the banks are scamming you.Lol I'm about in the middle at 38
But yeah, people my age and younger are known to nuke credit, knowing how crap it all is. I just find it funny that our generation are mocking the older ones for being mis-sold endowments when half of us are terrible with credit that we know exactly what's what.
It's no better than yours and other users implications on endowments tbh, which was kind of the point I was going for. But I will clear up and say that I mean that there are a not insignificant number of people who carry significant lines of credit outside of a mortgage. Cars, holidays etc all kept on plans like PCP etc. People take out the credit because it's within means but with almost zero regard to what happens if they lost their jobs.
I was terrible in my 20s and I'm still paying for it over a decade later. Although I've very much learned to enjoy saving for things now.
I agree that at school there should be a life class for people to explain how the world actually works outside of school - I know it should be on parents but lets be fair - there'd be some who'd be left to the wayside.
Why do you care? :S
My comment was a retort to monty who suggested he had a representative view. Not sure why are you involved tbh - monty doesn't need a bag holder and has made some very good points (seeing past any poorly worded posts/seemingly obtuse posts on my side).
r/wallstreetbets content has definitely benefited though.
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Soldato
Because you claim to be speaking on behalf of all "people your age", based on a self-selective sample of what, 20 people at most?
Maybe he just enjoys his cars and wanted a Golf R?
Soldato
Yes, that must be it
I live in Birmingham... Cruising around the local housing estate in a car with a German badge (and the obligatory pops and bangs map) means one of 2 things (or often both):
A) Talk to me for all your herbal, powder and tablet needs.
B) I've "made it" in life bruv
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I qualified as a 'financial adviser' back in the late 90s.
I can confirm that selling an endowment linked mortgage was far more financially rewarding than a repayment mortgage.
Typically mortgages were a fixed fee, one off payment. If you could link an endowment to it, you got the mortgage fee and the ongoing premiums for the endowment went onto your book as recurring income and therefore commission.
While there was supposed to be protection in place for the client, doing financial fact checks and recommending products in a hierarchy of priorities, it was fairly easy to bend the rules to sell what you wanted to people.
I can confirm that selling an endowment linked mortgage was far more financially rewarding than a repayment mortgage.
Typically mortgages were a fixed fee, one off payment. If you could link an endowment to it, you got the mortgage fee and the ongoing premiums for the endowment went onto your book as recurring income and therefore commission.
While there was supposed to be protection in place for the client, doing financial fact checks and recommending products in a hierarchy of priorities, it was fairly easy to bend the rules to sell what you wanted to people.
It was in response to monty's suggestion that half of people under 38 were poor with credit. You understand how him suggesting something like that, led me to suggest something equally entirely made up/irrelevant?
Anyway, what cars are you PCP'ing?
C) Stolen.
Yes, that must be it
I live in Birmingham... Cruising around the local housing estate in a car with a German badge (and the obligatory pops and bangs map) means one of 2 things (or often both):
A) Talk to me for all your herbal, powder and tablet needs.
B) I've "made it" in life bruv
Well in the case of A, they probably are wealthy
Soldato
A 3 year old eNiro (which I'm sure you already know from the EV thread in motors)
D) all 3
Well Mr.Meldrew; case closed on why you can only imagine a young lad driving a Golf R with pops and bangs to flaunt wealth or be a drug dealer.
Are you going to plod for the remainder of your life, like the first half?
Soldato
Very much this.
As a finance person at the start of my career I took out my first mortgage (a repayment) when all my friends and their parents were taking out endowments.
Person after person told me I was mad and I should be getting an endowment.
My response was always I want low risk for me house and will take higher risk elsewhere. None "got" the risk element until years later.
It was a little wild West, although as ever with financial products the majority of the population never understood. I had a friend who was selling them and he had to produce a low, mid and high investment return.
It was always the same in his words and what I saw.
1) People would ignore the low after being told it was based on returns below what the market had performed in recent times. So 1 mentally dismissed.
2) People would base their outgoings on the average
3) People would get the extra from the higher into their heads and expect something like a car worth of extra at the end.
I mean literally 9 out of 10 would think like that by the time they had ended their session with an IFA.
Most mis-selling was not really, but the companies couldn't defend their positions in many cases with no documentation to back it up.
For most people endowments were not that much of an issue, but plenty never bother to check anything so when suggestions (they pretty much always were suggestions until the very end) came for upping payments many just ignored them.
What endowments confirmed was that most consumers are not sophisticated enough to be able to be linked to something that requires monitoring and action.
Hence sales people could influence to lean that way, but again, the product wasn't a bad product if there was evidence the person wouldn't just ignore all the paperwork and expect the large cheque to land on the mat in 25 years. (alas I would say most were of that mindset)
Soldato
Almost certainly, I'm quite comfortable with life at the moment, lots of sacrifices made when younger has put me in a great financial position, 2 awesome kids, wonderful partner, well paid job I love, and while living in Birmingham isn't ideal, it has meant we've been able to pay off a much bigger chunk of the mortgage, putting us in the position of looking to move to a nice big farmhouse in the countryside in the next 4-5 years.
Sorry that didn't turn out to be the insult you intended it to be
Anyway, this is getting off topic now, so I'll leave you to carry on calling out people's real life experiences as lies, based on your extensive internet expertise
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Soldato
It's a bit before my time but the way I read about it the mortgage advisors were meant to be impartial and offering you the best product for your circumstances. However there was a bunch of them pushing endowment's onto people where it wasn't the right thing for them and they were getting decent commission out of the deal.
I don't think it's news that a number of people are finically illiterate and will not make them best decision of their circumstances. That's why mortgage advisors etc. are meant to be licensed/accredited.
I don't think it's news that a number of people are finically illiterate and will not make them best decision of their circumstances. That's why mortgage advisors etc. are meant to be licensed/accredited.
Soldato
Unfortunately this is going to be the case in any position where incentives are offered, there are always going to be people who find loopholes in the regulations - just look at the recent legislation forcing insurance companies to offer the same price to renewing customers as to new ones. The insurance companies now "change" the product they offer, so the renewing customer stays on the old product, and the new customer gets the new one - because it's a different product, the regulations don't apply and so the price can be different.
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I remember in my sales training how to "toe the line". I was brought up skint and often projected this onto my Customers; I remember the outrage I had when someone wanted to buy a Rangemaster cooker hood and I was baffled they wouldn't take the no-name one for £600 cheaper.
The headline was, you can't decide yourself if the Customer is financially literate enough. It is up to them.