Act now on mis-sold endowments: new article

goblin

I'm not sure on the etiquette of the forum, therefore sorry if I am interrupting where I shouldn't, but wonder if someone can PLEASE help me. I posted my problem a few weeks back and didn't really get anywhere then.

Basically it would seem I am unable to get help from either:

the Ombudsman - as the firm who sold me the policy are no longer trading and I haven’t been able to establish who bought their business, or

the FSCS – as the policy was bought on 14 July 1988, and the FSCS can’t investigate any policies sold pre 28 Aug 1988.

I keep shoving this to the back of my mind, believing there’s nothing I can do, but my Standard Life endowment due to pay off my 25 yr mortgage in 2014 is set to fail by around 50%. I just keep ostriching over the future and think I’ll probably have to sell up to survive in the end. I’ll be due to retire shortly after that.

I anyone out there has any advice, I would be eternally grateful.

mayb_2

As no one else has replied to this I thought I would offer my pennyworth.

If there is really nothing left for you to do about the misselling of your endowment perhaps you should investigate selling it and taking out a repayment mortgage for the rest of the term. It sounds daft but there are lots of firms offering this now - you see them advertised all the time in places like teletext. Or if there really isnt enough time for a repayment mortgage to work for you, you could sell up and buy cheaper to get rid of the debt - you wouldn't have to do that until the end of the term and by that time you might have made a hole in it and it might not look so bad. Another option is to keep the endowment going but make capital repayments on your mortgage as and when you can to reduce it - or remortgage altogether if you can afford it and stretch the term as far as you can.

I am sure there must be a Money Tip somewhere on the best way to sell or remortgage and I do know someone who did this in the last few years before they retired and got themselves out of a mess.

Just some thoughts to get you started - feel free to reject them all.

vinno65

dunstonh wrote:

Thats harsh. I pay out around £6500 a year to cover mis-sales. Yet I or my company have not had one mis-sold endowment or any other mis-sale for that matter. How would you like to pay out that much a year because a neighbour had a problem that had nothing to do with you?

Dunston I'm starting to boo hoo here for your plight! I have never had a car crash and don't intend to but still have to have my car insured or i'll be nicked!!

Alternatively you could always get another job, nursing or teaching perhaps?

Regards Vinno

dunstonh

Dunston I'm starting to boo hoo here for your plight! I have never had a car crash and don't intend to but still have to have my car insured or i'll be nicked!!

Bet you dont pay £6500 though

Paul_Herring

dunstonh wrote:

Bet you dont pay £6500 though

Seriously, how do the costs compare? For car insurance, you're (usually) insuring against (potentially) replacing a car + legal costs. My last car insurance was ~£200.

How much does your insurance cover you for? I'm assuming there is an upper limit?

dunstonh

How much does your insurance cover you for? I'm assuming there is an upper limit?

There is an excess of £3500. That's a laugh because statistically, that's higher than the average payout. This years renewal is actually lower than last year and one of the other changes was a reduction of excess from £4500. The liability is up to £500,000.

My gripes on that is that as a partnership, the partners are equally liable for life on the advice that is given. We cannot close the doors and walk away. I could be aged 88 and get a complaint in and I am financially liable. No dumping of my liabilities on the FSCS. Yet, we have to pay exactly the same to the FSCS pro-rata as those that can dump their liabilities and walk away.

I can tell you that being financial responsible for your own advice doesn't half make sure you do a thorough job as you know full well that its you that will be paying for it if it goes wrong. If you made all advisers financially responsible for their own advice, it would clear up problems straight away. And its that unlevel playing field that does tend to get on my nerves. The sales force adviser (typically tied but there are some IFA sales forces around) have no personal liability and get missell and move on to another employer and do that same again whilst those that have personal responsibility cannot. Those that have personal responsibility have to pay for those that do not.

vinno65

Hi Dunstonh,
No I do not pay £6500 but my premium is expensive and keeps going up every year to pay for more irresponsible and less careful drivers. Is this fair? Maybe not but we don't want the insurance company losing out do we. Oh! and who was it that designed endowments!!

Anyway as its all so expensive any thought on the career change I mentioned? Economics teacher perhaps?

No-one forced you to become an IFA or is it vocational?

regards Vinno

dunstonh

Anyway as its all so expensive any thought on the career change I mentioned? Economics teacher perhaps?

I couldnt afford the pay cut.

As you will see from my previous post, that it isnt necessarily the concept of insurance but the fact that it is not a level playing field. Those that are have a lifetime liability pay the same as those that do not. Those that do not transact in higher risk classes of business or do not transact in certain areas pay the same as those that do. There is also no no-claims discount

I wouldn't even consider changing my job but I would appreciate if the regulation and requirements were level between companies. Although that isnt to be unexpected as the FSA has continued to be against small firms and has a preference for companies operating on a salesforce basis. A bit of a stupid stance if you ask me as it's mostly salesforces that create the problems and not the small independents. However, the FSA prefers to manage the larger companies which have defined processes rather than many small firms with their own processes.

mayb_2

dunstonh wrote:

I couldnt afford the pay cut.

It looks like your expense for misselling cover in relation to your income is about equivalent to someone elses car insurance against their income. So therefore not that expensive to someone like yourself.

I was recently told by a Financial Advisor that although I was obviously miss sold my with profits policy (in other words an endowment) the Financial Ombudsman would never allow my claim to succeed because if he did it would open the floodgates to similar claims from many others and put people like her out of business. There was a time when people thought the stock market could never fail to increase and made promises to investors that they believed in at the time. The failure was to advise people of the risk involved.

She was proved right - so do we owe people in the Financial Services a living or can we ask that they take out insurance to protect themselves and us from 'mistakes' they might make when advising us? Can you absolutely gaurantee that you never got it wrong or never will, or are you also relying on the protection of the Ombudsman? I may sound harsh but so is losing your pension or your mortgage cover because of misselling.

mayb_2

Surely all financial advisors understand that the way insurance works is that everyone pays in but only some get paid out - therefore making money for the financial institutions that offer insurance cover!