Act now on mis-sold endowments: new article

Well, I'm not sure about this. I was offered a low cost endowment, but I knew at the time that the "low cost" bit meant the mortgage wasn't guaranteed to be paid. To be honest, I thought everyone knew that.

Instead I took out a repayment mortgage. This meant I paid out more than if I'd
taken the endowment - but my mortgage is now paid off.

Had interest rates and inflation remained high, then the low-cost endowment would have turned out to be the correct choice. Would anyone who had taken out a repayment mortgage then be entitled to sue for mis-selling? Or are you only entitled to compensation if you make no decisions on your own behalf?

Most endowment complaints are not being upheld because they are classed as mis-sold. They are being upheld on the basis that the documentation is insufficient to support the recommendation fully. Of course much of that is based on todays rules being used retrospectively and perhaps thats the unfair bit.

I do get where you are coming from though.[/QUOTE]

Most are upheld because they were simply not suitable, not because of retrospective application of rules.

Got it! Over £8000 but how do I know if they have offered me enough?

The two calculations that can be used (3 if you include a voided policy) are defined by the FSA so unless they have put the figures in the software wrong, its unlikely to be incorrect. Many will show you how they came by that figure.

Also claiming in retrospect the £50 it cost me to convert mortgage to a repayment even though I have no records.

Some will cover the cost of conversion, and cost of advice when taken, but they will usually want a receipt.

I bought the policy in a Halifax branch, from a lady wearing Halifax uniform and badge. The Halifax say that at that time they had independent financial advisers working in their branches and were under no obligation to tell me this.

Correct for 1988. Remember no regulation back then.

The FSCS can't look at my case because it was sold before August 1988. I now appear to have no comeback. Any suggestions?

If it truely isn't a Halifax case, then it is end of the road.

Many thanks to both MSE for the kick/advice and to Endowmentaction for the mechanics.

Having complained (using an adapted letter produced from Endowmentaction), we've just been advised that we were found to have been mis-sold and so subsequently have been offered both a compensation payment and (unexpectedly) the option to cash-in our endowments.

The short-fall compensation and offer value for cash-in each equate to around 4.5% interest on the amount we've paid into the endowment and so we feel that's reasonable.

What we're a little less sure of is the future of with-profit endowments. We're 15 years into a 25 year plan, so 10 years left to run.

Gut feeling is that, to keep the money in equity based investments, we'd be better of taking the cash-in and re-investing the money in a share-based fund that is not with-profit.

My (basic) understanding is that the with-profit vehicle relies on continuous years of good performance to yield good compounded growth, which is then 'secured' through the paid-as-interest and final bonus basis of the with-profit mechanism (as opposed to pure capital growth of shares that could then drop in value on the day your policy matures). The downside of this mechanism is that if you don't get year on year good performance, the interest payments and final bonus collapse (as per history).

So, by cashing in we're saying that we believe that the capital growth of shares will offer better odds that the alleged safety of with-profits endowment.

Your thoughts?

As a P.S. (Not sure where else to post) - Does anyone else recall the off-loading of excess profits that happened in the midst of the dot-com boom. I remember news reports about insurance, investment and pension companies offloading captial as extra-ordindary bonuses to shareholders because they were "over capitalised". (I think that was the term.) After the dot-com collapse and it's impact on long-term investments like pensions and endowments), I haven't heard anyone question the probity of this action nor even mention it again, yet it was headline news at the time. Am I missing something?

Cheers - thanks again -

Alligator.Crocodile
(As in see you later... - in a while.... Not as in prehistoric predators! )