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&#39Keep clients up to date on savings endowment performance&#39

Providers and advisers alike need to take responsibility for keeping clients informed of the progress of their savings endowment policies, according to Sofa chairman Nick Bamford.

Product providers are required to provide regular illustrations for all pension policies and mortgage-linked endowments but they do not have to do so for savings endowments.

Bamford says that in recent market conditions some people with savings plans may be unaware that their policy could pay out well under the illustration given when they took out the plan. He believes that investors need to be told how their plans are faring as they may have taken it out to meet future costs such as school fees.

ABI spokeswoman Emma Grainge says savings endowments do not receive regular projections unless they fall under its Raising Standards scheme, which cover 67 per cent of new business.

Grainge says the ABI has suggested, in response to the FSA&#39s review of with-profits, that the requirement for annual statements should be extended to all with-profits policies including savings endowments.

Bamford says: “There is a dual role there for providers to communicate and equally for the adviser to sit down with the client on a year-by-year basis and ask what is your intention with this policy, what are you trying to achieve.”

Grainge says: “Raising Standards is having a halo effect on existing business. It is only for new business at the moment but over time that might sweep backwards.”



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