Think You Were Missold Your Endowment Complain Now!!!! [CLOSED]

I consider that I was mis-sold my endowment policy in 1983, can anyone advise me as to whether I would be able to make a claim as it's such a long time ago, I have been given conflicting advice regarding this matter

Forget the ambulance chasers! Do what I did - Took the free information from this wonderful website ( thank you very much Martin) Spent about half and hour getting my information together used the link to the Which Website as recommended by MSE and behold - a £1000 and no commission to ambulance chasers. My endowment is with Royal Liverpool now ROYAL SUN ALLIANCE - they gave in without a wimper - they had lost my paperwork relating to the sale of the Endowment and so they couldnt argue and paid up. So even though I am saddled with a pants £19000 endowment I have use the £1000 to pay off a bit of my mortgage now thus cutting it down and therefore paying less interest!

Back of the net!!!! Thanks to the internet!

Hi bargain addict,

I think you actually need to have made a loss in order to get compensation.

If I don't have a shortfall but think I was mis-sold can I complain and will I achieve anything by doing so?
Yes. If your complaint is upheld, you may have lost out financially even if you don't have a shortfall and if this is the case, you will be offered compensation.

There are some very good endowments out there. Some will have tax relief on premiums (LAPR), others will be invested in decent funds and/or have low target growth rates. Not all are bad (short terms - say 15 years or less, high target growth rates and poor potential funds are bad points).

An endowment that is above track will generally be worth more than the correction amount required to put you back on repayment basis. Therefore you have to consider whether it is worth complaining, only to be told that your complaint has been upheld but as the surrender value of the plan is higher than the correction amount.

payless wrote:

But I have seen a number of clients who have endowments but appear not to understand the risks, - were but were sold expecting a very large surplus, - they have no shortfall , but thats because the premium was selected assuming a very low growth rate - whilst this may be a prudent way of "ensuring " policy paid off mortgage, it would have been a massively more expensive route than a repayment method, so even with no shortfall they are possibly "financially disadvantaged"

Valid point. I used to set up endowments with a 4.4% target growth rate. Even then, I always issued full cost breakdown of endowment versus repayment and I can tell you that on many occassions the endowment mortgage (bottom line) was cheaper per month than repayment. Most people chose the cheapest option.

I havent had any upheld endowment complaints as my documentation was pretty good. All those years of other advisors laughing at my reason why letters being like "war and peace" have paid off.

I have no problem with people complaining where advice is bad and they were not told. I do feel a bit irritated by the number of people who seem to have very clear memory of what actually was said and provided which has no reality to what happened. Luckily when you have a copy of the endowment vs repayment costs and a disclosure message on it which states that the endowment is subject to investment returns which require x% per annum to hit target and failure for the endowment to meet that percentage will result in the endowment not being able to pay the mortage in full, which is then signed by the client along with the reason they chose either method, seems to invalidate the false claims. (i.e. endowment mortgage was chosen as it was cheaper than repayment option)

It is also valid that a number of good endowments have been surrendered or sold because of the misunderstanding by some of how endowments work and the assumption that they are all bad.

Many IFAs have tales of endowments showing shortfalls yet producing surplus at maturity because of the flaws in the projection methods. I have seen it myself. A few examples have been posted on the forum by others in the past.

Take an endowment that needs 6% per annum to hit target. Lets assume its invested in a UK equity fund. That has a pretty good chance of hitting target and providing a surplus over 25 years. However, the projections show 4%. So any endowment set up at 6% required growth is going to show a shortfall when projected at 4%. In addition, endowments are front loaded with charges and grow in a curve. So endowment projections in younger plans are even more likely to show a shortfall. The projection method has failed to take into account the charging method. I came across a red projection the other day. The client had a copy of the original illustration and when I obtained current and surrender values, it was over 5 years ahead of where it should have been on the illustration to achieve target. If that continued, it would have paid out about 40% surplus. However, they had a red letter!

Ok, rather long winded here but my view is that you should complain if you have a valid reason for doing so. However, learn about your endowment first. If may even help your claim if you find out things about it you didnt know about. It may also help you find out that it may not be as bad as you think.