Endowment shortfall

kathryn123_2

I wonder if any one can give me some advice. We have 3 endowments which are all showing a shortfall, the biggest being just over £15k. We were totally mis-sold & misguided, however we were turned down. We also took it to the FSA who also turned us down. The reason was we had a "company mortgage" & therefore preferential rates, which i understand but surely we never benefited by more than 15k! Think i need a good mathmatician! Help please if you can.

dunstonh

If you have been turned down by the firm and the FOS then what is it that makes you think they advising firms was in the wrong? Especially when you consider that the FOS is ever so slightly consumer biased and disregards certain documents that contain the risk warnings.

The reason was we had a "company mortgage" & therefore preferential rates

Do you mean you worked for the insurer or the retailer of the financial products and got discounted terms? If so, these cases are not normally put through on advice basis but execution only. That means you cant be mis-sold as no advice was involved.

You need to give more detail really.

dfh

To the OP-You need to give us more details to be able to comment.

colin13

how long have your endowments got to go,,I am in amber risk of shortfall now where as last year I was in red,,so must b getting better,,if you have a few years left it may b ok,,remember when u took it out u were told it would pay morgage and give u lump sum lol

kathryn123_2

Yes my husband worked for an insurance company, the 1st endowment was taken out in 1985 & we have about 16 years left to run on it. We were never told or given an option of a repayment mortgage. We were on amber & today have been notified we are now red, but i guess anything could happen in 16 years!

dunstonh

Yes my husband worked for an insurance company

Thats the killer in your case.

We were never told or given an option of a repayment mortgage.

They dont have to on non advice cases.

When people make complaints about endowments they are complaining about the advice given. As you arranged yours on special terms direct with the provider and without advice, you cannot complain about the advice as no advice was given.

If you had gone to an IFA and asked advice about the endowment then the IFA would have to go through the options and pros and cons. However, direct to provider doesnt have to do any of that.

Most employee complaints are turned down for that reason. A small number have got lucky where the provider has last the info to show they were employee cases but apart from those there is little hope. The fact the provider and the FOS have turned you down reflects that.

On the plus side, you have been saving money each month by having lower repayments and will be for the next 16 years. So, if you utilise that saving and put it towards a mortgage over payment you may find you are not actually any worse off at the end of the day.

SmileyG_2

dunstonh wrote: »

Thats the killer in your case.



They dont have to on non advice cases.

When people make complaints about endowments they are complaining about the advice given. As you arranged yours on special terms direct with the provider and without advice, you cannot complain about the advice as no advice was given.

If you had gone to an IFA and asked advice about the endowment then the IFA would have to go through the options and pros and cons. However, direct to provider doesnt have to do any of that.

Most employee complaints are turned down for that reason. A small number have got lucky where the provider has last the info to show they were employee cases but apart from those there is little hope. The fact the provider and the FOS have turned you down reflects that.

On the plus side, you have been saving money each month by having lower repayments and will be for the next 16 years. So, if you utilise that saving and put it towards a mortgage over payment you may find you are not actually any worse off at the end of the day.

Dunstonh

Why do you always defend the IFA, when it's quite clear that endowments have performed nowhere near expectations or the original illustration.

Most people were sold endowments on the basis that:
a) There was a high probabilty it would pay off the mortgage.
b) There may be a surplus.

Most people accepted this at face value.

As an IFA, would you seriously consider recommending a with profits endowment as a means of paying off a mortgage, with high costs and trailing commissions?

SmileyG

dunstonh

Why do you always defend the IFA, when it's quite clear that endowments have performed nowhere near expectations or the original illustration.

What IFA? The OP didnt use an IFA.

Most people were sold endowments on the basis that:
a) There was a high probabilty it would pay off the mortgage.
b) There may be a surplus.

One of the most common reasons for purchase was the lower monthly cost compared to repayment mortgages. That conveniently gets forgotten by many.

As an IFA, would you seriously consider recommending a with profits endowment as a means of paying off a mortgage, with high costs and trailing commissions?

Of course I wouldnt. That method has been obsolete for a very long time. Also, endowments didnt pay trail commission.