Endowment mis selling

in-need_of_money

Can anyone guide me? I was sold an endowment in 1999, by Prudential. The target amount should be 62,500. I have had letters to say that it is on target, but when I took the policy out, it was never indicated that it might not pay off the mortgage. We were given the projected figures, and I concentrated on the lowest as a figure, not to get too excited about what I could receive. At no point was it indicated that their could be a risk of a shortfall. Do you think I have a right to complain about the lack of information? Thanks :rolleyes:

dunstonh

Do you think I have a right to complain about the lack of information?

You have a right to complain. Whether the outcome suits you or not is a different matter. You say you weren't told. They probably will say you were. A 1999 sale of endowment is going to be quite well documented compared to a 1989 sale and they will almost certainly have adequate documentation to support them. You only hope is that the advisor in question wasnt very good at documentation and it wasnt a case checked on a random sample by Pru.

As it happens, Prudential have one of the best with profits funds out there and that is probably why its still on track. Plus your timing has been pretty good as your contributions really began to be invested after the stockmarket crash.

If a complaint is upheld, they look at the balance of what a repayment mortgage would be at. They then look at the surrender value of the endowment and deduct that from the interest only balance (a few other things are considered as well). If there is a shortfall, the company would have to pay compensation for that amount. If there is no shortfall, then there is no compensation as the endowment mortgage is in a better situation than the repayment mortgage.

A number of decent endowments have been performing very well over the last few years and the amounts of any shortfalls are much lower or have been wiped out. Whilst the poorer endowments show little signs of recovery. Yours is one of the better ones.

Whilst yours is showing on track, its unlikely you would get any compensation, even if a claim was upheld.

in-need_of_money

I feel reassurred now, thank you. We have always paid for good insurances, hopefully this will pay off and be enough to finish our mortgage at the end. I am not bothered about whether it makes any extra, of course that will be a bonus, but so long as it is enough to pay the mortgage off, that is all that matters! I will keep on top of it, thanks again

dunstonh

It was in the press yesterday that Pru have issued less amber/red warnings this year and the number of policies back on track or in surplus has increased. Personally, with them, I expect that trend to continue.

It just highlights how poorly handled the endowments situation has been. It was just plain stupid to review these cases just after a stockmarket crash.

As it happens, those that complained 2-3 years ago and got compensation then but held onto their plans, do have the potential to end up with surplus and keep the compensation. In my eyes, that isn't fair.