Two Traded Endowment Policy market makers, Beale Dobie and Policy Portfolio have decided to pull out of the market. This will mean two less companies in the market for buying with profits and whole of life endowment policies. Beale Dobie and Policy Portfolio withdrew from the market with effect 2 August 2004 although the companies will still continue to trade in other areas of business and continue to be regulated by the Financial Services Authority.
Our View
The market for second hand endowments has been falling over the last few years. The main reason is because bonus rates have fallen and there is little prospect of them picking up. Some with profits providers have announced that annual bonuses will be zero and there is no prospect for terminal bonus.
These statements have hit the second hand market hard because there is little or no prospect of gaining better profits by purchasing an existing policy. If you have contracts with Beale Dobie and Policy Portfolio, you will be receiving correspondence from them shortly.