FSA determined to give endowments a fair trial

In the face of a barrage of media criticism of endowment mortgages, FSA press officer Sarah Modlock explains the regulator's viewpoint

By providing perspective and encouraging investors to talk to their adviser, the FSA is placing responsibility and control in the hands of the industry. Our hope is that firms wield this sensibly and make the most of the opportunity to limit any damage which any poor initial advice may have caused.
FSA chairman Howard Davies has provided some much needed perspective in interviews, speeches and in his evidence to the Treasury select committee. He is on the record as saying the vast majority of endowments are expected to do well.
Treasury economic secretary Melanie Johnson has added her voice to the call for balance and has made clear her understanding that "people who have a shortfall may not necessarily have been badly advised".
ABI deputy director general Tony Baker has even braved the wrath of Watchdog presenter Ann Robinson this month when the "endowment scandal" featured on the BBC TV programme.
Insult will be added to injury if investors rush to give up their endowments. The potential for even greater disadvantage is considerable. Surrender in haste, repent at leisure.
In attempting to provide balance, the FSA is not ducking problems which may be facing the endowment market. In particular, we have received a large amount of anecdotal feedback about 25-year endowment policies sold to people in their 50s and 60s - something which is clearly questionable.
But we must deal in facts. We have devoted a series of visits to firms to establish what is actually happening in the field. Following analysis of the results, the FSA will have a clear picture of any further work which needs to happen.
This will also be a crucial time to provide further information and reassurance to consumers. In the meantime, let's not throw out the baby with the bath water.

If we believed everything the media told us, we would eat nothing, drink nothing and probably think twice before leaving the house each morning.
We would also keep all our money under the mattress or, if you take the Independent on Sunday's advice, a sock.
The fact is that we live in a world full of risks and, therefore, actuaries. The good news is that most of them have long odds- the risks, that is.
Anyone who has had their eyes and ears open in the last few months would be forgiven that dodging traffic on the M1 is less risky than having an endowment mortgage.
My faith in much of the media has nose-dived due to the prolonged onslaught of hyperbolic nonsense about endowments.
What started as a series of reasonable concerns has spiralled into the portrayal of endowments as the source of financial ruin for the British public. I do not recall endowment policies being among the evils in Pandora's Box.

As I write, the wacky race is still on for the next angle which could make or break the reporter's name.
Into this angry sea of coverage, the FSA has twice issued its consumer lifeboat: a plain English fact sheet entitled, Endowment mortgages - what to do if you are worried.
This places great emphasis on a clear and essential message; never cash in your policy or stop your payments without taking advice first - or you may lose out. This has been conveniently ignored or obscured by those who have been too busy worrying sheep.
The FSA has brought some facts to the table and is providing constructive and impartial advice.
Many of the 3,000 or so people who call our investor help line each week are looking for basic facts and reassurance. They feel worried and confused by talk of product bans, debates over projection rates and misleading cobblers about criminal misselling.