Endowment - offer of compensation !

mike00_2

Hi all,
hope someone can offer some advice,

I,ve recently recieved a letter from LLoyds TSB offering compensation for a missold endowment.

The endowment was for 20 years commencing 08/1996.

To make the complaint I used the standard Which letter citeing ;

1 Other options for repayment were not discussed.
2 The advisor did not explain there was a risk the endowment would not meet the target amount.
3 The advisor did not discus in full the fund your endowment was to be invested in.
4 The advisor did not fully explain the fees and charges on the policy.
5 No fact find was completed during the sales process and therefore the advisor did not have full knowledge of your financial situation.

These points for complaint were made with the best recolection of a meeting almost ten years ago.At the same time I made a request for her file.

In there corespondence offering compensation they state "I,m sorry but I could not Include your file as requested, as we only have limited documents on record.Anything specifically referred to in the letter will be included for you." Nothing was included,though some photo copies of the origional meeting with the advisor have been forwarded by another department??!

The offer of compensation is £1856. And is calculated by making a "capital comparison.Difference in balance of endowment mortgage against that of an equivalent Capital Repayment mortgage( as at 16 May 2006) Less Endowment Surender Value(as at 16 May 2006)" Difference £1481.

Plus

How much paid to endowment against what would been paid if a repayment mortage had been taken out. £372

And Intrest payment based on loss of above £2.68

For the above calculations the assumptions made are

1 "as we didn,t know your morgage lender, we have used Lloyds rates as your plan was sold through the Lloyds Bank branch network."

2 " your existing policy had the additional benefits of Living Cover Benefit & Waver of Premium Cover when your policy started. The decreasing Term Assurance that you would have had to take out to cover a repayment mortgage didn,t offer these benefits and we've adjusted our calculations to take in to account of this.Importantly, as theses benifits were not an option with our repayment mortgage cover we cannot offer theses benefits on any replacement life policy."

We have moved to another property,almost three years ago, and have a repayment mortgage for this property though we have continued to maintain the endowment.

I hope I have enclosed enough background to form an answer to my questions,which are

1 in the assumptions above what does point 2 mean in laymens terms and is this assumption mininmising the compensation?

2 is the formula above,to caculate compensaton, standard and is the amount offered resionable?

3 is it possible to hold out for a better offer ?

4 if an offer of compensation is accepted what are the options for the endowment?

Thanks in advance,

Mike

dunstonh

1 in the assumptions above what does point 2 mean in laymens terms and is this assumption mininmising the compensation?

Living Cover was Black Horse Life's name for critical illness cover. For a fair comparison, they have included a decreasing term assurance policy on the same terms in the calculation. That is normal and correct.

2 is the formula above,to caculate compensaton, standard and is the amount offered resionable?

Yes.

3 is it possible to hold out for a better offer ?

No. All ex BHL policies are unit linked and have a daily value. Majority ended up in the managed fund so any delay or request for recalculation could end up with a higher or lower redress because the surrender value changes daily.

4 if an offer of compensation is accepted what are the options for the endowment?

Surrender, keep as it is, keep but switch funds (they do have a few good funds in there).