(no subject)

[ewx]

When your house is on the line you assume that the guarantees on offer are copper bottomed.

...without actually having seen the T&Cs this man was shown, I'd suggest that the more you have to lose, the less you should be assuming. Certainly the notion that the stock market can fall as well as rise should not have been unfamiliar in 1987. When does a large number of people losing a bet stop being a reminder of caveat emptor and start being a scandal?

My wife and I are going to have to work until normal retirement age and perhaps even a little beyond.

I'm finding it a little hard to be very sympathetic about this. Retiring earlier than 'normal' is surely a bonus, not a right, and not one that I think my own generation are very likely to enjoy in large numbers, if current demographic trends continue.

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[ewx.livejournal.com]

Perhaps I'm above-averagely sceptical of "trusted professionals"; but then, surely the notion that such people (not just financial advisers, but doctors, politicians, the lot) get it wrong from time to time (whether through error or greed) is not one that's new since the late 80s.

In this case the obvious question to ask the adviser would have been "what if the stock market goes down instead of up?" If the answer is "then you're in a hole" then you are now aware of the risk; if the answer is "that won't happen" then you say "1929" and find a new adviser. (And even if the buyer was so ignorant to have never heard of any stock market falls before taking out the endowment policy, it seems to me that they can hardly claim ignorance of the 1987 crash when buying that house in 1996.)

Anyway ... like I said I've not seen the T&Cs that the person quoted in the report saw - perhaps there was indeed some kind of black and white guarantee which cannot in fact be cashed in now that it's all gone pear-shaped, but it doesn't seem very likely - but I do find it a bit hard to believe that he managed to remain entirely ignorant of the risk.

And that's the key point, to my mind; if he really, really didn't know what he was doing, then there may be a case for some kind of compensation from the state. (But then, we don't compensate people for losing at roulette because they don't know the rules...). If he did, and just lost the bet, then really he should suffer the loss himself.