Act now on mis-sold endowments: new article

safetygirl

As a consumer they were definitely cheaper, I agree, I remember the figures and it was a no brainer. I'm sure historically the returns were good enough to pay off the mortgage and have a little left over. Generally the concensus over time was that stock market although it fluctuated, would average out over enough years, which i guess it did on many occasions. People had not considered moving their mortgage etc., like we do now days.

It would be interesting to hear from someone where the endowment route worked for them.

dunstonh

It would be interesting to hear from someone where the endowment route worked for them.

Upto around 1999, virtually every endowment issued prior to that had always hit target and most paid very big surpluses. I recall seeing cheques of 2 to 4 times more than target even with mid 90s maturities. The change to shortfall was almost cliff edge and not gradual. The 43% dot.com crash being the real killer followed by the solvency requirements which forced many insurance companies sell equities at the low point and invest in low return but low risk assets. The opposite of what investors are told to do. They then missed out on the 5 year period that followed where double your money was possible.

Quiz

andy.m wrote: »

That was my angle, surely I am missing out on some free cash by not having been missold?!

I took out an interest only mortgage with Abbey National & a with profits endowment plan with Standard Life on the advice of a Financial Adviser from Lawes Montague in Wokingham who apparently "defaulted" in June 2006.

I was badly advised to replace my previous Repayment Mortgage with this Mortgage/ Endowment arrangement on the promise it would repay the mortgage & achieve a lump sum addition, but in fact it will pay less than half the target amount based on current performance.

Over the past 5 / 6 years I received Red Alert Shortfall Letters from Standard Life. Today I learnt about the Financial Services Compensation Scheme for defaulted financial advisers. Will my claim to the FSCS be barred because it is more that 6 years since the endowment was arranged in 1991 & more than 3 years since I received red alert shortfall letters from Standard Life?

I believed perhaps nievely that my claim must be made against Lawes Montague(who sold me the policy & mortgae) & have disappeared, but appear on the FSCS list of defaulters(gone bust) rather than Standard Life; is that correct?

dunstonh

Over the past 5 / 6 years I received Red Alert Shortfall Letters from Standard Life. Today I learnt about the Financial Services Compensation Scheme for defaulted financial advisers. Will my claim to the FSCS be barred because it is more that 6 years since the endowment was arranged in 1991 & more than 3 years since I received red alert shortfall letters from Standard Life?

If Std Life have not timebarred you then you can use the FSCS. However, most Std Life plans are now timebarred. You can ask Std if you are timebarred or not.

magpiecottage

The FSCS will check whether Standard Life issued a timebar letter. If it did then you can expect your claim to be rejected.

chaz_bird

We were sold our endowment in 1984.
It had performed so badly we cashed it in and used savings to help pay off the mortgage.
At the time of sale we were told it would give us a "nice £80,000".
In my dreamsI'm not sure if the broker is still in business.
Any hope?

dunstonh

chaz_bird wrote: »

We were sold our endowment in 1984.
It had performed so badly we cashed it in and used savings to help pay off the mortgage.
At the time of sale we were told it would give us a "nice £80,000".
In my dreamsI'm not sure if the broker is still in business.
Any hope?

No hope. Regulation didnt start until April 1988. The "broker" only has to consider complaints on applications made after that date. FSCS protection started August 1988 for cases sold after that date.

chaz_bird

Thank you dunstonh, I'll now see if I can get any luck with PPI !

hek_2

Hi
I have been contacted by a company saying we can claim compensation on an endowment we bought in 1999 and surrendered a few years later. I am aware that we may be time-barred but as we surrendered the policy we were never actually sent a letter saying that it might reach a short fall, so in theory we are only just aware that we were miss-sold.

Rather than pay the 42% the company would like to take out of a successful claim, I would like to do this myself. However, I have followed the link to the which site for claiming but I cant see the template letters there. Does anyone know where I can find them please?

Thanks in anticipation.

Helen

dunstonh

I have been contacted by a company saying we can claim compensation on an endowment we bought in 1999 and surrendered a few years later. I am aware that we may be time-barred but as we surrendered the policy we were never actually sent a letter saying that it might reach a short fall, so in theory we are only just aware that we were miss-sold.

You wouldnt be affected by the red alert timebar but you would be affected by the FSA's 3/6 year timebar. You have 6 years from commencement or 3 years from being reasonably aware that there is an issue to make your complaint. Both of those would see an reasonable time bar applied.

There are hardly any claims companies doing endowment complaints nowadays as the issue is largely over. There are a couple of dodgy ones still doing it (you can see the posts on this board. One name comes up time and again).

You also have a few issues in addition to the above:
1 - by 1999, the documentation on the sale endowments was very strong. Far better than earlier years. Risk warnings were solid and comparisons were done in most cases
2 - you only paid for two years. So, if you look at the cost difference between a repayment mortgage and endowment mortgage in that period you are probably only looking at a few pounds. Indeed, it could easily be that the endowment was better value (in earlier years, repayment mortgages paid back very little but endowment mortgages with their typical £10-£20pm cheaper cost could easily be better value.

After all these years, a template letter would do you no good. Plus, template letters have lower success rates then personalised complaints. despite the coverage, endowment complaints success were still a minority of cases. So, what reasons for complaint would you have? What evidence do you have to overcome the documentation showing all the risk warnings, comparisons with repayment mortgage etc?