Act now on mis-sold endowments: new article

dunstonh

I have received letters from Norwich Union sayng that there will be a shortfall.

No you havent. You have received letters showing examples at three defined projection rates. Projections that do not include any price promise and no terminal bonus. There still may be a shortfall but you need to be aware that the figures may or may not be realistic.

I have not pursued it as the Leeds is no longer in existence and hence no address to send a complaint letter.

Leeds liabilities were taken on by the Halifax. So you complain to them. However, be warned that time barring may mean you are too late.

jamesd

When did you get the shortfall letter? What are the numbers and details of any investments on the shortfall warning letter? What is the mortgage amount to be repaid? When is it supposed to end?

It's eminently possible to achieve investment returns in excess of 9% after fees with well selected investments so if a projection at that rate shows no shortfall you should have time to recover things.

colcycling

Can anyone help me. I was sold my endowment in 1986 by Provident Mutual, who were then taken over by another company. This happened about 3-4 times and my present company is Norwich Union. Is it a waste of time trying to pursue a claim for the possible shortfall of £5500. Is there something about a 15 year claim limit from when the policy commended.

dunstonh

Who sold you the Provident Mutual plan? Regulation came in during 1988 and prior to that date there was no protection. Banks and insurance company salesforces voluntarily (bet they wish they hadnt now) agreed to review pre 1988 cases whereas accounts, solicitors and IFAs (not that the term IFA existed prior to 1988) do not.

NU did allow a switch from PM with profits at no cost so its worth checking if that was done. Plus NU has an endowment promise which may apply to you and the shortfall may not be as much as that.

Devjon

Dunstonh,
thanks for explaining, I had a red letter saying that there would be a shortfall at all the projected percentages, I did not see anything about a possible terminal bonus bringing things back on track.
I can recall the manager of the Leeds telling my wife and I that the policy would pay off the mortgage and there would be a substantial sum on top of that to do with as we would!

robmob

We attempted to claim last year from the L&G for an endowment taken out in 1995 through an IFA. Unfortunatley the IFA no longer seems to exist and the L&G are saying that as it was not sold directly by them and through an independent that they cannot consider our claim.

Is this correct and is there another route we can go down to make our claim?

Many thanks

Rob.

dunstonh

thanks for explaining, I had a red letter saying that there would be a shortfall at all the projected percentages, I did not see anything about a possible terminal bonus bringing things back on track.

I don't know if the Prov Mutual plans got the mortgage promise or not. NU plans and CGU plans did. The info was issued in 2001 and updated with 2004 statements.

I can recall the manager of the Leeds telling my wife and I that the policy would pay off the mortgage and there would be a substantial sum on top of that to do with as we would!

One change of word can change the whole meaning. Switch "would pay off" with "could pay off" and the chance of the complaint being upheld changes. "Would" is a virtually a dead cert upheld complaint. Could is perfectly acceptable when used with the appropriate risk warnings. Over the years its hard to remember what is said. That is why documentation is so important.

We attempted to claim last year from the L&G for an endowment taken out in 1995 through an IFA. Unfortunately the IFA no longer seems to exist and the L&G are saying that as it was not sold directly by them and through an independent that they cannot consider our claim.

Is this correct and is there another route we can go down to make our claim?

L&G are correct. If the adviser no longer exists, then you take the complaint to the Financial Services Compensation Scheme (FSCS). To verify the adviser no longer exists, you can ask L&G the name and address of the IFA that is being paid the renewal premiums on our endowment. it could be the same firm but at a new address or it could be the adviser has joined another firm. A self employed/partner IFA carries their liability even if they stop working even if they are now aged 88 and have Alzheimer's.

bob2_6_57

I was sold an endowment policy on the advice of an independant advisor, I remember him showing me estimated projections starting at around 14% p.a down to 8%p.a he said the average over the period of 25 years was about 11% but the worse scenario would be 8% giving me a nice sum over my mortgage this was in 1986 but as I understand it or so the way friends prov told me I cannot claim because it was before 1988 and the advisor was an independant and not retained by them. I f I can claim and were to get compensation there will be a drink in it of 10% to any charity of martins choice.:beer:

dunstonh

1986 and not tied to insurer means end of the road. Regulation didnt come in until 1988 and pre 88 cases are not protected under the FSA, FOS or FSCS. The advising firm has to voluntarily agree to reviewing cases of that era. Solicitors, Accountants and what are now IFAs have not (and rightfully so).

The rates quoted back in the 80s were higher and reflected performance that was in place at that time. It was relatively easy to get double rate returns back then even on poor quality investment funds. Whereas nowadays, the projection rates are lower (4, 6 & 8%) and much more realistic and a tad more cautious if anything, that wasnt the case back then. The assumption was that things wouldnt change. Luckily they did (although that means endowments are paying out less, we are all better off for what happened).

What you have said doesnt mean it was bad or incorrect. It is factual information about the historical rates of return. Its why you see the warning (which is now commonplace but less so back then) "past performance is no indication of future returns" (or similar).

evelynblue

defender_of_the_weak wrote:

Evelyn

When was your case turned down, can you post some details about who the case was against and reason for rejection

Thanks - I will post details later! IF I can track this down again!

Evelyn