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Driving force of with-profits

I recently followed a plumber driving erratically, with his mobile phone number proudly displayed on the van. I rang him from my hands-free phone, commenting that if my driving was as appalling as his I would not want people to have my phone number.

I was reminded of this incident when I read Philip Milton&#39s letter (Money Marketing, May 6) in which he grossly over-simplifies the endowment matter and demonstrates a remarkable lack of knowledge.

Just possibly, it was the “obscene commission” which enabled Terence O&#39Halloran and others like him to service his clients year after year without further payment and to be there to deliver the proceeds of maturing policies and death claims.

It was the inclusion of profit made on the sale of term insurance which added so much to the attractiveness of the original traditional with-profits products.

I know of no other way to benefit from the enormous profit made on term insurance, other than owning a life company or being a with-profits policyholder.

As for the “one size fits all”, I think Mr Milton would find that Terence O&#39Halloran&#39s clients were offered a range of solutions, only choosing a low-cost endowment policy where it suited their needs at the time.It was the bundling of premium waiver, life cover, critical illness and, in some cases, payment protection which made the product such good value. Some clients actually preferred this to having separate vehicles, with their own charges, etc.

The life companies have made an appalling job of explaining how their products work and have been quite happy to allow the front-line troops (IFA or tied) to be the cannon fodder for the criticism, much of which is justified and a lot of which is not.

Lee Clarke

Thomson&#39s Wealth management,

Cardiff

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