Think You Were Missold Your Endowment Complain No...

[MSE Martin]

This thread has now closed. Please use this new thread to continue the discussion.

If your endowment was missold (meaning not just that it will underperform, but you weren’t told it may underperform or were incorrectly advised) then the time is running out to make a complaint and get compensation.

This site isn't really about endowments, it's slightly off the MoneySaving products track. By far the best site out there for this is www.endowmentaction.co.uk which is run by the Consumers Association. It will guide you through the rules. It's very important you try and deal with this as soon as possible.

There are companies out there which advertise "we'll fight your endowment case for you" . Then they take a cut of whatever your compensation is. I'm not a big fan of these you're far better doing it free with endowment actions help, yet if you are at the end of your tether and don't think you will do it any other way, then its better than doing nothing.

However do check absolutely that you will not pay a penny if you don't get compensation and that even you do they will simply take money from your compensation and not charge a fee or make you buy an insurance policy.

[ReportInvestor]

This ABI survey backs up Martin's view on going it alone

Some are not convinced about the ABI's figures that ambulance chasing firms have a worse success rate than individuals acting on their own.

But the consensus in the press is to go for it yourself, and I agree.

[Fairdo]

Judging by the way some of them have tried to advertise on this forum in such an underhand way, I know exactly what my opinion of these Ambulance Chaser firms are like.

I know I shouldn't tar firms with the same brush, but I cannot see a real benefit to these firms. Especially when there is free advice elsewhere. Both in Martins recommendation and through Which online. (Covered in a previous post I replied to)

[defender of the weak]

Most cases are resolved in the clients favour (65-70% initial uphold rate) best thing to do is if you think your complaint is fairly normal, big company, staff member, no warnings of shortfall try it yourself. The odds are in your favour. If you do not fit into that category or have already been turned down consider professional companies but do not pay more than 15% of any compensation offered on a no win no fee basis

[Kezza1]

Thanks Martin - the CA website produced a good letter which was easy to edit. We'll cross our fingers and see.

[MSE Martin]

Great Kezza, it'd be wonderful to hear from you and others if you succeed.

[Amethyst]

Hi all,

We thought we had been mis-sold an endowment and wrote the necessary letters to our insurance company - they eventually agreed and we were given a cheque!

We did it all ourselves and did have some resistance from the company, but they had to agree in the end.

We just had to send all our documentation from the mortgage and insurance off to them - we sent copies.

Good luck, it does work.

Amethyst

[billy the kid]

Undertook our own claim for miss selling with Black Horse Life, and won. BHL didnt put up a fight. My advice, try for yourself. Using a broker may be throwing some of your compesation away on a task that is not that difficult.

btk

[robert_h]

i found the which? website myself after googling around. the letter creator page was a great help - i selected the options which i felt applied, and sent of the letter to the endowment company (let's call them P). P replied later, with their own form asking for more details, which I supplied. Every now and then, P would send an update letter stating the case was still under review, and a guestimate of when it would be completed.

Finally, I received a letter detailing all of their findings. They had included a copy of the original application document, which detailed some of the things I had made the complaint about. For example, had not assessed my attitude to risk. Seems in fact they had, but I had no recollection of this (it was 1996).

However, my misselling claim was upheld, and they paid out. The total money back from them, after the payout + cashing in the endowment was greater than all the money I had paid into the endowment (short of £60 a month for 9 years) so I was satisfied.

Overall, a simple process - send a complaint letter generated from the which? website (link in martin's 1st post), supply any additional information requested, and wait. I think it was over in 2 months.
Just checked:
endowment cash in check May 11th, I complained at the same time.
endowment payout check cashed on July 8th

My advice - dont use a company offering to complain on your behalf, and taking 25 or 30%.
Do use the which? website to construct your own complaints letter, and follow the process yourself.

good luck
Robert

[egroeg]

I find it somewhat ironic that the Consumers Association (Which) were actually recommending Endowments and are now assisting people in their claims against the companies/advisers. Likewise, I would be very surprised if a lot of the "ambulance chasers" were not previously in the Financial services industry and have seen an opportunity to make money. They do not need to be regulated by the Financial Services industry !!

[EdInvestor]

One related pointer at present if you are reviewing the state of your endowment: interest rates are widely expected to be cut next month, and mortgage rates at some providers are already coming down.

So the next few months could be the time to consider remortgaging to repayment, and possibly surrendering* the endowment to cut the total amount owed. If you successfully claim misselling, the compo money could be paid in too.

If you can get a good mortgage deal and you pay the endowment premiums in as well, you might be able to cut the size of the shortfall dramatically.

If you want to remortgage now but the endowment surrender or compo money won't be available till later, make sure the new mortgage deal doesn't have penalties for overpayment.


*Note that not all endowments should be surrendered - post separately for info.Standard Life With-profit endowment holders should not surrender before next year's planned demutualisation or they will miss out on their windfall.

[Superwoman]

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

[turner34]

I believe i was mis-sold my endowment in 1989, so i have just been onto the which site and downloaded their complaint letter and it will be straight in the post box first thing in the morning.

Fingers crossed and cheers Martin

[ambersmita]

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!

[bargainaddict]

I think we were mis-sold with Royal London in 1986-7. Do I contact them? We are fortunate in that our last statement said we were on track to pay out but I don't believe we were warned properly about the risks and were encouraged to change from our repayment mortgage of 1 year to endowment. Do I contact Royal London direct? The thought of trying to sort this is a bit scary, does it usually take long? Can you keep the endowment going if you do get compensation, we only got 4 years left. Thanks for any help.

[EdInvestor]

Hi bargain addict,

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

[Ian W]

For Bargainaddict - I think EdInvestor, whose advice is usually spot-on from his other posts I've read, may be wrong on this one.

From CA werbsite:
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.

http://www.which.net/endowmentaction...ing.html#seven

But you will obviously need to have lost out financially to get compensation. Don't know whether that's for you to prove, and if so how??

[dunstonh]

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]

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"

[dunstonh]

Originally Posted by payless

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.