Act now on mis-sold endowments: new article

chic109

dunstonh wrote: »

Yes. If found that it was a mis-sale, he may be the one that has to pay the redress out of his pocket. It depends on what his status was at the time. It could also impact on his career path (decent firms dont tend to like advisers with complaints on their record - advisers have to declare all complaints to the PI provider and to any future employer).

What do you mean regarding his status at the time. He was employed by a company of Financial Advisors - this is the firm I have addressed the complaint too - I have made no mention by name of the advisor.

Anon

I am in a similar position to chic109 (and in answer to your question, although you submit the claim to the company, the claim is actually made against the salesman/woman and I understand when the company investigates they have to prove to their company that they didn't mis-sell).

I bought an endowment in the early 90s - according to the recent annual statement, it is online to mature at around 60% of the target value (if the market runs at 6% - not a chance at the moment), and even the optimistic 8% is even more unlikely to get it closer to 70%, therefore must need 20% or more to get to the target amount!). I have been "red lettered" for a while. So much for paying off your mortgage and likely to have money left over ... :rolleyes:

I am considering making a claim (though no doubt late, as I have ignored this and assumed that it would correct itself with the rising market), however, the salesman was a relative and I know that they sold me the product that they were supposed to, following all the company information. My concern is making a claim will fall back on the salesman as you have to prove that you were mis-sold, and I don't believe he did the mis-selling as it was the documentation that painted the rosy picture of covering the mortgage and having a lump sum at the end (with the small cautionary note about markets going down as well as up!).

Fundamentally, I believe that there was a flaw in the product (for example, the illustrations of potential growth and which one was adopted as the "realistic" target) and all the companies are trying to pass the blame to their salesforces to make them the scapegoat (and no doubt ensure that some people cannot claim), rather than accept that they created a flawed product which would create an avalanche of complaints.

What would you advise - should I make a claim or not?

Many thanks

Anon

dunstonh

I bought an endowment in the early 90s - according to the recent annual statement, it is online to mature at around 60% of the target value (if the market runs at 6% - not a chance at the moment), and even the optimistic 8% is even more unlikely to get it closer to 70%, therefore must need 20% or more to get to the target amount!). I have been "red lettered" for a while. So much for paying off your mortgage and likely to have money left over ... :rolleyes:

Those assumptions are not correct. Market conditions currently can actually be very beneficial for monthly contribution plans as long as they are not maturing in the short term. Typically, one the bad period has passed, you get a good growth period and these units bought cheaper can be the ones that make the most money. So, whilst you are not going to see 8% in 2008 you could see 20% or 30% in 2010 or 2011. You have already grown by over 8% in the last few weeks. So, its the long term average that matters and thats why example projections assuming 6% or 8% p.a. year in, year out really do not work well with monthly plans. As you never get 6% year in, year out.

I am considering making a claim (though no doubt late, as I have ignored this and assumed that it would correct itself with the rising market), however, the salesman was a relative and I know that they sold me the product that they were supposed to, following all the company information.

About 3/4 of endowments are now time barred or ineligible to claim. So, it could be late. The time bar is 3 years from the first red/high risk notification. However, the company has to have activated the time bar and given you warnings of the expiry date in writing. This typically appear on the statements. So check there.

My concern is making a claim will fall back on the salesman as you have to prove that you were mis-sold, and I don't believe he did the mis-selling as it was the documentation that painted the rosy picture of covering the mortgage and having a lump sum at the end (with the small cautionary note about markets going down as well as up!).

If he worked for a salesforce, then he will not be hit by it. Most salesforces are not even recording the complaints against the adviser. If he was an IFA or working for a small tied/multi-tie then it would be recorded against him and he would be liable to pay any redress (subject to his employment rules. Small firms usually make the adviser liable).

Fundamentally, I believe that there was a flaw in the product (for example, the illustrations of potential growth and which one was adopted as the "realistic" target) and all the companies are trying to pass the blame to their salesforces to make them the scapegoat (and no doubt ensure that some people cannot claim), rather than accept that they created a flawed product which would create an avalanche of complaints.

Many would agree with you there. Especially in the late 80s, early 90s when projection rates didnt necessarily reflect reality. However, from about mid 90s when target growth rates were typically 6% or 7%, then these are much more realistic and achievable for unit linked and will probably still come in on target if the term is 25 years or more. Even if they look awful at the moment.

What would you advise - should I make a claim or not?

If you are still able to and you think you were mis-sold then you should complain.

shazbat69

I hope that I have posted this to the correct thread, I apologise if not.

Can someone please advise me on the reply I have just recieved from the FSCS, as this has now been going on for over 5 years!!


Dear .......

Thank you for your e-mail of 25 November 2008 about your potential claim for compensation in relation to your endowment policy.

As explained to you in our letter of 7 April 2003, as your endowment policy was taken out in August 1988. Unfortunately, this means that we cannot consider your claim as the policy was bought before the commencement date of the Investors Compensation Scheme (ICS), which was later replaced by the Financial Services Compensation Scheme.

Under our rules we cannot look into investment advice given before 28 August 1988. Unless you received advice after that date which led to you entering into a financial commitment, and subsequently incurring a financial loss, we will be unable to help you.

If you want to pursue this matter, you may wish to take legal advice, or speak to your local branch of the Citizens Advice Bureau.

I hope this email has explained our position but, if you have any further questions, please telephone our helpline on 020 7892 7300.

Yours sincerely

dunstonh

I hope that I have posted this to the correct thread, I apologise if not.

Can someone please advise me on the reply I have just recieved from the FSCS, as this has now been going on for over 5 years!!

It shouldnt have taken you 5 years to find out you are not eligible to complain. We could have told you in minutes.

The response you have from the FSCS is correct and that means you have no consumer protection as it was taken out prior to the introduction of the FSCS.

Its end of the road for you. Your only other option is court action against the firm but seeing as the firm doesnt exist anymore, you have no-one to take to court. They have no assets which can be used to pay you even if you won and you would just suffer costs. Not that very many court cases win on these either.

T4LFR

I was sold an endownment by an IFA (1999) that was working in a local estate agent (which are no longer in my home town) and I am not even sure that they exist.

So who do I complain to - the estate agent (who may not even exist) or direct to friends provident????

ystalyfera

dunstonh wrote: »

Those assumptions are not correct. Market conditions currently can actually be very beneficial for monthly contribution plans as long as they are not maturing in the short term. Typically, one the bad period has passed, you get a good growth period and these units bought cheaper can be the ones that make the most money. So, whilst you are not going to see 8% in 2008 you could see 20% or 30% in 2010 or 2011. You have already grown by over 8% in the last few weeks. So, its the long term average that matters and thats why example projections assuming 6% or 8% p.a. year in, year out really do not work well with monthly plans. As you never get 6% year in, year out.



About 3/4 of endowments are now time barred or ineligible to claim. So, it could be late. The time bar is 3 years from the first red/high risk notification. However, the company has to have activated the time bar and given you warnings of the expiry date in writing. This typically appear on the statements. So check there.



If he worked for a salesforce, then he will not be hit by it. Most salesforces are not even recording the complaints against the adviser. If he was an IFA or working for a small tied/multi-tie then it would be recorded against him and he would be liable to pay any redress (subject to his employment rules. Small firms usually make the adviser liable).



Many would agree with you there. Especially in the late 80s, early 90s when projection rates didnt necessarily reflect reality. However, from about mid 90s when target growth rates were typically 6% or 7%, then these are much more realistic and achievable for unit linked and will probably still come in on target if the term is 25 years or more. Even if they look awful at the moment.


If you are still able to and you think you were mis-sold then you should complain.

mine was taken out in the mid 90's for 25yrs to, so it might still be good by then if i'm lucky?we were told £40,000 guaranteed like everyone else too.......

dunstonh

So who do I complain to - the estate agent (who may not even exist) or direct to friends provident????

The estate agent. FP dont have any liability for the advice given so you cannot complain to them. However, it is worth checking your statements to see if you have been time barred. Most of FP's endowments completed their time bar during 2007 and 2008

grumpynotoldman

dunstonh wrote: »

The estate agent. FP dont have any liability for the advice given so you cannot complain to them. However, it is worth checking your statements to see if you have been time barred. Most of FP's endowments completed their time bar during 2007 and 2008

Which is probably why they've just dropped their final bonus payouts to 5%.9th Jan 2009. Their Incompetent investotors taking fees even when they aren't able to manage funds. Remind you of anyone in particular.
Having sold the family silver, do you suppose we are set for a Weimar-style inflationary spiral, as the govt. prints money to undervalue what we do have.
I pity anyone buying an annuity at the moment. :eek:

Bilko99_2

Hi Everybody

I have a quick question that I hope someone may be able to answer.

I was sold an endownment mortgage from Abbey way back around 91. The original mortgage was around 45k, and now the outstanding amount is around 20,000 as I pay 300 amonth instead of circa 100.

I wrote to the Abbey using the standard forms for reporting mis-sold endownments.

Someone from Abbey called me and was asking howh much I overpay each month etc. When I asked if this was relevant, she explained that the cacluation Abbey uses to decide how much to reimburse, also takes account of how much of the mortgage is still outstanding.

She confirmed that had two people taken out the exact same Mortgage, and one of them had partially paid off the mortgage, they that person would receive a smaller amount. (If Abbey agreed both had a valid case of course)

Have i just shot myself in the foot by trying to pay off the mortgage earlier.

Thanks in Advance
John