endownment question?

stevet_2

hi i'm new to this but here goes iv'e just seen martin on the tv on about miss selling of endownments and wondered if i may qualify to claim even though iv'e cashed my endownment as part of a divorce settlement i had a letter shortly before my divorce advising me that there would be a shortfall in my endownment policy but ignored this as i was in the process of my divorce any help would be great cheers

dunstonh

On what grounds would your complaint be?

stevet_2

hi my complaint would be originally i was told that the endownment would repay my mortgage only to be told later it wouldnt ok i cashed it in to pay part of my divorce settlement but was i missled in the first place and can i claim even though i cashed it in?

what i will say though is like me many people were told their endownment would repay their mortgage and give them a lump sum for their retirement i feel terribly sorry for those in the position of not having enough to pay their mortgage off and good luck to them if they can claim and lets hope one day the banks will one day get their act together
cheers steve

dunstonh

You can try the complaint. You may or may not get lucky.

I wouldnt feel that sorry for most people. One of the more common reasons for taking endowment was that the monthly payments were lower. Now conveniently, that has been forgotten. Plus many endowemnts are now going back into surplus again and its only really the closed providers with low solvency with profit funds where the concerns are to be had.

darktrader

dunstonh wrote:

You can try the complaint. You may or may not get lucky.

I wouldnt feel that sorry for most people. One of the more common reasons for taking endowment was that the monthly payments were lower. Now conveniently, that has been forgotten. Plus many endowemnts are now going back into surplus again and its only really the closed providers with low solvency with profit funds where the concerns are to be had.

Thank heavens someone is redressing the balance!

I have three endowments. One is "on target" The second is a few grand short but - and this is the important bit - will return a healthy profit compared to what I paid in - and the third I took out as a savings plan.

When I took out the first endowment mortgage interest rates went to around 14%. As they have come down I have had more disposable income to save and invest - and that's what I did. So I will actually pay-off my mortgage before the first endowment actually matures.

I have never contemplated making a complaint against the people who sold me my "poorly" performing endowment because I went into a financial decision with my eyes open. I wonder if in 10 or 20 years time people will be complaining because IFA's refused to offer endowment policies?

EdInvestor

I have three endowments. One is "on target" The second is a few grand short but - and this is the important bit - will return a healthy profit compared to what I paid in..

Hello dark trader,

My impression is that the "important bit" for most people is not the return they are getting on the amount of money they've paid in, but the amount by which the endowment is falling short of repaying their mortgage, and how they can find enough money to make this shortfall go away.

I could be wrong of course......;)

moneysaver

dunstonh wrote:

One of the more common reasons for taking endowment was that the monthly payments were lower. Now conveniently, that has been forgotten.

Absolute Rubbish.

Are you trying to say that if people were told the endowment was cheaper than other methods but there was a chance that it might not meet the target amount i.e not pay off your mortgage, we would would be stupid enough to go for it. Maybe it was down to hard selling to get commision for the SALESMEN why so many were told the same thing(pay off mortgage + Bonus').


Moneysaver

dunstonh

moneysaver wrote:

Absolute Rubbish.

Are you trying to say that if people were told the endowment was cheaper than other methods but there was a chance that it might not meet the target amount i.e not pay off your mortgage, we would would be stupid enough to go for it. Maybe it was down to hard selling to get commision for the SALESMEN why so many were told the same thing(pay off mortgage + Bonus').


Moneysaver

You may think that was rubbish but it was the most common reason for endowment sales that I did. In most cases, the risk wasnt an issue. Getting the cheapest payment method was.

Do not assume that all endowments were mis-sold. Also, do not assume that greed only works on the side of the advisor. The endowment product could often be £20 a month cheaper than repayment on a £40k mortgage and consumer greed to get a potential big payout, like their parents did, was a common driver.

moneysaver

Originally Posted by moneysaver
Absolute Rubbish.

Are you trying to say that if people were told the endowment was cheaper than other methods but there was a chance that it might not meet the target amount i.e not pay off your mortgage, we would would be stupid enough to go for it. Maybe it was down to hard selling to get commision for the SALESMEN why so many were told the same thing(pay off mortgage + Bonus').


Moneysaver

dunstonh wrote:

You may think that was rubbish but it was the most common reason for endowment sales that I did.

In most of these Endowment missold complaints we are not talking about what you did, we are talking about salespeople in general. I thought you might have had enough sense to realise not everyone that sold these policies are like yourself, an honest IFA giving good advice.


Moneysaver

ReportInvestor

The idea that the endowment was cheaper AND would give you a nice tax free surplus at the end of the day was a winner for both the salesperson and the consumer.

Incredibly many of these consumers didn't realise that they had become investors, let alone understand the nature of their investment. (Who does understand with profit endowments ?)

I can see the arguments on both sides, inlcuding dh's. But the main fault was with the industry, as opposed to individual advisers, because only its top men could understand the risks. Unfortunately it also thought it was onto a sure-fire profit winner.

moneysaver

I am glad someone has a neutral point of view on this subject.

As we did not all take on Endowments for greed.


Moneysaver