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Bourke showing a lack of knowledge

Well done, Colin Caulfield (Money Marketing, August 3). Exactly what I felt. For a moment, I thought I was reading some positive information on with-profits policies. But no.

Personally, I am fed up with Lorna&#39s views. They still continue to show a real lack of knowledge. A client of mine&#39s policy has just matured. With the bad press over recent years, she was getting very worried her policy would not pay off the mortgage. Not only did it but it also gave a surplus of three times the mortgage.

With this, she has stopped work until her husband&#39s retirement, something she could not have done with a repayment mortgage. The loan was for only £11,000. What differences are we seeing with £50,000-plus policies? Here, the surplus is over £150,000 – no small amount, Lorna.

Looking at the policy reviews occurring, so far, only one of the policies I have looked at is behind its initial assumptions and that by only 0.5 per cent a year. Please note, Lorna, this has included all companies, not just the top ones. On the other hand, all policies reviewed have said more money needs to be paid if the client wants to reduce the assumption to the suggested 6 per cent. So far, none have.

When they see the insurance companies&#39 funds have produced some 10 per cent to date (after charges), they struggle to see why they need to lower it to 5 per cent (6 per cent less typical AMC). Low inflation/lower returns?

Ever since Bacon & Woodrow raised this theory in 1993/94, it has not happened so far but what a disaster it has caused (the Tep market has never been so full). What are other brokers seeing and are any financial papers going to cover these issues? People should not have to worry unnecessarily like my client.

Martin Brook

Director

Brook Financial Advice,

Torquay, Devon

You do not need to handle stock or cash. You only need to act as a postbox

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