Endowment claim- first stage rejected by IFA

jacobjohn7

Hi, advice please from other people who have gone through this procedure, my first mis-selling letter to the IFA who provided our then CGU endowment (now AVIVA) has come back from them saying they disagree with it being mis-sold. I used the template letter. I however still stick to my guns, as it was def sold to us with the added bonus that it would pay off mortgage AND provide a nice lump sum on top, to do something nice with... I have filled the ombudsman forms in, and am due to send this off, is there anything i have missed, and is this normal for the IFA to try to palm off with a rejection. The reply they sent me I disagree with some of their points. And also they say that it was on track, but have had an AMBER warning. SO please any advice appreciated, of how to best screw em down at this stage.
Thanks
John

benjo

I could be way way off the mark here, Im not an advisor but I did go through this about 10 years ago successfully. Im really dredging my memory here but if I remember correctly..... the fact that the policy was sold as "def sold to us with the added bonus that it would pay off mortgage AND provide a nice lump sum on top" isnt in itself misselling.

Assuming they explained something like this....

Payment of the mortgage would require the policy to make an average of (example only) 7% over the period.

Payment of the mortgage AND an added bonus would require the policy to make (example only) 7% + 1% = mortgage paid off + £1000 bonus or 7% + 2% = mortgage paid off + £2000 bonus.

AND importantly if the policy made on average below the (example only) 7% to pay the mortgage then you would have a short fall.

IF they did indeed explain this, then on these grounds alone I dont think you can claim that it was missold - you were informed of the potential benefits and risks and you made the choice in full possession of the facts.(At least thats what I seem to remember).

Now, if you can prove that they guaranteed the policy would make ??% or that they failed to inform you of the full key facts, or that (as in my case) you were told there was no alternatives then you could claim that the policy was missold.

I hope this helps.

EdInvestor

Endowment misselling claims are based on a misjudgment of your attitude to risk.

Thus, if there was a possibility that the endowment might not pay off your mortgage (there always was this possibility) you were not told about this,and it would have stopped you from going the endowment route if you had known, you have a case.

The advisor must prove you were not missold.You do not have to prove anything.

dunstonh

And also they say that it was on track, but have had an AMBER warning.

Quite possible. I have seen endowments with amber warnings based on current projection rules but when you look at the values based on the illustration and time passed, they are on track.

The advisor must prove you were not missold.You do not have to prove anything.

Not quite as simple as that. Older cases where rules were not as strong as today means that balance of probability decisions can be made. Although the general rule of thumb is correct as you see it.

That said, if the OP has no proof of mis-sale and is just saying it was then they are going to have to rely on the IFA not having any documentation to back up their recommendation. If the documentation exists an the risk warnings are in it and there is a correct risk assessment involved then there is not much chance of success.