Reputation
For many years with-profit funds were very popular and large numbers of such policies were sold within the United Kingdom and in the United States.
Recently with-profit funds have had a large amount of negative press due to the introduction of MVRs. This has led people to question the opacity in setting bonus rates and the over-complexity of the product in general. Simple to understand products have been encouraged recently and the nature of the conventional with-profit fund does not fit with such simple policies. Alternatives such as a more fund-type product, CPPI or smoothed managed funds are yet to show a significant popularity amongst consumers.
Secondly the Equitable Life company sold a large number of policies with guarantees in the contract. After a series of court cases the company was required to meet these guarantees, which it did not have the money to meet. This resulted in a reduction of the value of all the policies issued by the company. This reduction received considerable negative publicity and damaged the reputation of with-profit policies.
Read more about this topic: With-profits Policy
Famous quotes containing the word reputation:
“I am sorry to say we whites have a sad reputation among many of the Polynesians. The natives of these islands are naturally of a kindly and hospitable temper, but there has been implanted among them an almost instinctive hate of the white man. They esteem us, with rare exceptions, such as some of the missionaries, the most barbarous, treacherous, irreligious, and devilish creatures on the earth.”
—Herman Melville (1819–1891)
“Our culture, therefore, must not omit the arming of the man. Let him hear in season, that he is born into the state of war, and that the commonwealth and his own well-being require that he should not go dancing in the weeds of peace, but warned, self- collected, and neither defying nor dreading the thunder, let him take both reputation and life in his hand, and, with perfect urbanity, dare the gibbet and the mob by the absolute truth of his speech, and the rectitude of his behaviour.”
—Ralph Waldo Emerson (1803–1882)
“The reputation of generosity is to be purchased pretty cheap; it does not depend so much upon a man’s general expense, as it does upon his giving handsomely where it is proper to give at all. A man, for instance, who should give a servant four shillings, would pass for covetous, while he who gave him a crown, would be reckoned generous; so that the difference of those two opposite characters, turns upon one shilling.”
—Philip Dormer Stanhope, 4th Earl Chesterfield (1694–1773)