Massive Endowment Shortfall. Is this right?

EdInvestor

levers wrote: »

I wrote directly to the life insurance company regarding the misselling and they were the ones that told me they cant do anything. Thanks

Did the lifeco sell you the policy ie, was the estate agent technically a "tied" advisor, working for them at the time, or was he independent?

If the former, lifecos will usually look at pre 88 complaints on a voluntary basis. If the latter there's no point in them passing it on if the agent is out of business because it won't be covered by the FSCS as it's pre regulation.

levers

I dont think he was tied, but am not certain. He work as a broker in an estate agent which since went bust. I asked him to find us a mortgage with a lender who would let me have a high income multiple. He found one and then just ticked the endowment box on the form, without really explaining anything. So yes in that respect I was dumb, and definitely missold, but we all learn from our mistakes and that really is water under the bridge because I have now passed the deadline for following up. As for my wifes policy, I dont think she was really missold as she knew about endowments when taking it out. In any case, what I'm really concerned about now is what to do about what is remaining on mine and the amount my wife has been told she will get.

maryotuam

Our endowment was sold a few months before the regulations came in by an estate agent (Black horse /Sykes Waterhouse). With a bit of investigative work on the internet I found out they had been bought up by Bradford &Bingley. I put in a claim to them and they paid up!!! Your original mortgage provider would have recorded who sold the endowment and it might be worth googling them in case they have been swallowed up by a larger organisation. Unlikely but worth a look.

levers

One further question on this. The 'bonus' added to my policy the last few years has been 0% and so the total bonus has remained the same. They also say that the bonus is likely to remain 0% for the foreseeable future. But then they go on to give projected plan values assuming a growth rate of 4%, 6% and 8%. If the bonus is likely to be 0%, why dont they give a projection assuming 0% growth? Or is the 'bonus rate' and the 'growth' 2 different things?

dunstonh

If the bonus is likely to be 0%, why dont they give a projection assuming 0% growth

4, 6 & 8% are the industry standard figures. A fund giving 0% can use those just as much as a fund that guarantees 10% p.a. has to use the same figures. The COB rules do say that providers can use lower figures if they wish and some have but at the moment it is optional.

Also, remember that annual bonus is just one part of it. A lot of providers have transferred the returns from the annual bonus to the terminal bonus.