Pre 1988 mis-sold endowments

bunglebum

Help please! I was sold a Standard Life policy to cover my mortgage in 1983 which pays out in 2008. As it is pre 1988 it is not covered by the current FSA legislation, but as far as I am concerned it was due to pay out in the region of £30,000, but it will be £11,000 if I am lucky. Also the maturity date is when I am 64 which is after my retirement date. Luckily, I have paid of the mortgage that it covered some years ago, but I had hoped that this would be a nest egg to help out with my very small pension. So far nobody is interested in helping me. In April this year I contacted the original brokers who sold it to me and they are just using delaying tactics saying they "have been unable to gather all of the information that they need". I have suggested that there must have been some cover for me via their registration with FIMBRA at the time of the sale. Am I right? What else can I do?

dunstonh

I have suggested that there must have been some cover for me via their registration with FIMBRA at the time of the sale. Am I right?

Nope. Sorry.

A 1983, 25 year policy shouldnt be doing too badly. Plus it has LAPR tax relief and you would have had greater MIRAS relief at the time as well. All that would go towards making the repayment mortgage much expensive than an endowment mortgage. Probably in the scheme of things, you have been better off with this endowment than you would have been with a repayment mortgage.

unsure

I'm afraid I have to agree with DunstonH. I had an SL endowment taken out in 1986. At the time I was told it would pay off my mortgage and produce a sizeable surplus. When the mis-selling/shortfall issue first began to surface I contacted Sl who assured me everythign was fine with my policy and not to worry. When it later became clear that a significant shortfall was likely I enquired about making a complaint on mis-selling. Standard Life didn't want to know and directed me back to the brokers --who no longer exist and don't seem very traceable. The Ombudsman's office was sympathetic but had no record of the broker. They said some bigger companies may consider earlier claims but it is entirely voluntary and unenforceable.
I gave up, sold the endowment, will sell the shares and never again have anything to do with SL.

Sparky5000

Firstly, can I thank all posters - I have just enrolled and the information that has been shared is invaluable.
At the present time I am going through exactly the same procedure as Unsure - so, although I started with some hope, his post does not fill me with confidence. Like unsure, my argument was not just that my FA (who has since disappeared) missold me the policy - it is also that SL actively discouraged me from mitigating any loss by advising me to 'hang in there'
Also, I am not happy with SL absolving themselves of all responsibility and immediately passing the buck to the original FA - simply because the FSA ruling allows them to do so. The spotty little FA that sold me the policy was authorised by SL to do so, was paid commission by SL, and signed the forms on SL's behalf. Surely he was an 'agent' of SL?.
I'm not giving up but you can't help thinking it's a case of heads they win and tails we lose.

dunstonh

The spotty little FA that sold me the policy was authorised by SL to do so, was paid commission by SL, and signed the forms on SL's behalf. Surely he was an 'agent' of SL?.

The complexion of the adviser is irrelevant to any claim and serves no purpose here or anywhere else. If SL just got an application in the post then they have no liability for the advice given. Only if the adviser represented SL do they take responsibility for the advice. You are not complaining about the policy but the advice given. SL are saying they didnt give the advice so its not their problem. And rightfully so.

If the adviser has gone out of business then you can complain to the FSCS if you are within their jurisdiction.

Sparky5000

Thanks for your reply, I was, of course, being slightly facetious with regard to the FA's complexion, which is my right - if you find it necessary to the highlight the relevance of such flippant remarks then perhaps you are in the right industry.
The policy in question was sold pre 1988 - as you will know it is highly unlikely that the FSCS will act on pre 1988 policies.
I would question your distinction between the advice given and the sale of the policy, i.e. that SL are not responsible for the advice given. If my credit references were bad, if my earnings potential was poor, if the FA had underestimated the policy value required, would SL have not queried these items. They must have checked some aspects of the documentation. If they did any checks at all then why did they not check to see why my expected retirement date was before the maturation date of the policy? Surely, they had an obligation to check what projection figures were being used to sell their policies.
Anyway, it's nice to find someone who actually thinks our financial institutions are doing a good job.

dunstonh

I would question your distinction between the advice given and the sale of the policy, i.e. that SL are not responsible for the advice given. If my credit references were bad, if my earnings potential was poor, if the FA had underestimated the policy value required, would SL have not queried these items. They must have checked some aspects of the documentation. If they did any checks at all then why did they not check to see why my expected retirement date was before the maturation date of the policy?

You can question it all you like but it doesnt change the fact that SL have no responsibility for the way a third party sells their products. Say you go into PC World for a laptop and they sell you a printer. Do you complain to the company making the printer and try and blame them?

Its not Standard Life's place to check if the policy being sold by a third party was correct. It is the job of the third party and that is why, since 1988, there is consumer protection on that advice.

if you find it necessary to the highlight the relevance of such flippant remarks then perhaps you are in the right industry.

Maybe so. But the fact you had to resort to comment on a possible medical situation of an individual was uncalled for. Do you laugh at people in wheelchairs?

Sparky5000

My argument is that the seller is not a 'third party'. The person describing and selling the policy is doing so with the authority of SL, namely he, or she, is authorised to gather the requisite information; he, or she, is authorised to sign the agreement 'on behalf ' of SL; he, or she, is paid a remuneration for doing so. I am absolutely convinced that there would be a good prospect of having him defined as an agent, if anyone had the resources and inclination to pursue it in Law.

As an aside, it is my opinion that SL were fully aware that their 'agents' were overselling the features of their products to achieve commission sales – a trend that remains an integral feature of the investment industry today, even with strengthened consumer protective legislation. As a Financial Adviser you will know that there is always a correlation between the volume of products sold and the amount of commission it attracts.

Of course, I do not laugh at people in wheelchairs – I have friends in wheelchairs, one of whom I will be enjoying a drink with tonight. I think your comment and ridiculous comparison is offensive and reflects considerably more about you than I.
I find no humour in disability but financial advisers split my sides

dunstonh

My argument is that the seller is not a 'third party'.

Not much of an arguement though is it. The person is not employed by standard life.

The person describing and selling the policy is doing so with the authority of SL, namely he, or she, is authorised to gather the requisite information; he, or she, is authorised to sign the agreement 'on behalf ' of SL; he, or she, is paid a remuneration for doing so. I am absolutely convinced that there would be a good prospect of having him defined as an agent, if anyone had the resources and inclination to pursue it in Law.

You may be convinced but you are wrong.

As an aside, it is my opinion that SL were fully aware that their 'agents' were overselling the features of their products to achieve commission sales

Its quite possible that was the case for standard life agents but seeing as solicitors, accountants and IFAs are not standard life agents then it doesnt make a difference.

As a Financial Adviser you will know that there is always a correlation between the volume of products sold and the amount of commission it attracts.

Yes and no. Commissions are paid on the basis of quantity of supply. However, with many advisers linked to networks nowadays, the individual adviser has no ability to personally improve their terms over another. Individual advisers or small firms not using networks or service providers would find it hard to improve terms due to the amounts of business that would be required to move up the levels.

I think your comment and ridiculous comparison is offensive and reflects considerably more about you than I.

I am sure that anyone suffering with poor complexions found your comments offensive.

I find no humour in disability but financial advisers split my sides

No more funnier than me knowing you arent getting a penny regardless of what you do or say.

Sparky5000

No more funnier than me knowing you arent getting a penny regardless of what you do or say.[/QUOTE]


It is incredulous that as a Financial Adviser you actually find it funny that someone has lost money through no fault of their own.
I fear for your clients.

bunglebum

Thanks for this - am trying to deal with the original brokers, but they are using delaying tactics, so not hopeful. I will try the ombutsman though.