Endowment help!? please

daleuk_3

Hi All,

I have just been speaking to my parents and realised that they are in the process of making a claim. They did their claim through a company called FS Complaint Handling, I cannot find much info on them via the net, other than their swindon address and phone number.

Any way my parents company is Pearl, they have recieved a letter of acceptance offering 3 options, dated July 2006:

Option 1, to allow the policy to continue and the Pearl Promise remains attached to the policy.

Option 2, allow the policy to continue, the Pearl Promise is removed and they will recieve compensation of £2382.34, of which FS Complaints take 25% + VAT!!!!!!! totalling £699.80!!!

Opton 3, to cancel the policy and recieve a total payout of £8209.34. "We understand that we will recieve this payment in two stages - surrender value of policy no xxx and then compensation payment of £2382.34."


Info from an update from Pearl (end of 2004):


((The target value was £20,000 by October 2014.

In April 2001, Pearl introduced the Pearl Promise, this states: "We promise that your maturity proceeds will not be less that you target amount provided that the average investment return achieved on the underlaying assets between 1 April 2001 and the maturity date of your policy compounded annually and after allowing for expenses and tax is at least 6%".

Is an average of 6% investment return still a realistic figure?

As we have reduced the exposure of the With Profits Fund to the stock market, and invested mainly in fixed interest investments, any increases or decreases in share prices will have a reduced impact on the fund compared to previous years. These changes were essential to ensure that policyholders' contractual benefits were protected and allowed us to meet the minimumstatutory capital requirements. Although achieving an average of 6% is now unlikely the terms of the Promise still apply.

What the Pearl Promise still means to you if the underlaying assets dont reach 6%:

If your maturity value (sum assured plus bonuses) is less that your target amount then we will increase it by the smaller of:
1. £3,900
2. the amount required to reach your target amount.

The Pearl Promise is subject to the following conditions that were set in April 2001:

* You must continue to pay all premiums in full.
* You must not alter the maturity date on or after 1 April 2001.
* You must not surrender/partially surrender or make your policy paid up before maturity.
* You must not reduce your premiums after 1 April 2001.

What should I do now?

You may be tempted to cash in your mortgage endowment policy, or stop making payments. Never do this without talking to our customer contact centre staff or your financial adviser first. You may lose out financially,and could be liable for tax. But you should consider taking action to repay the projected shortfall of £2944.)))



I think this is ridiculous! I wondered if my parents can get out of the thing with FS Complaints and write directly to Pearl?! (I have seen the links to Which? and I would do this for them! money in my pocket ) I have asked my dad for a copy of the contract he has with FS and he cannot find it!! (wanna pull my hair out!). I'm good with money so want to try and help them as much as possible. I would appreciate any help any one can give.

daleuk_3

I managed to find their terms of business:

TERMS OF BUSINESS

1. We will prepare your complaint for you, deal with your insurance company, or the IFA about whom you are complaining, and, if they do not pay straight away, we may, if we believe it is appropriate, ask them to put the case before the Financial Ombudsman Service. You will provide all such material and information as we need to do this.

2. If we are successful, we will retain 25% of the compensation, plus VAT. If we are not, you will not pay us anything.

3. If your case goes before the Ombudsman, you will not have to pay any costs. (Your insurance company or IFA will, but they cannot recover anything from you.) If the Ombudsman finds against you, you still have the legal right to go to Court. However, this may mean costs for you and we will not deal with this.

4. We will be able to stop representing you by notice to you at any time before you have been compensated. Of course, we are unlikely to do this because it means we will not be paid anything. Once you have returned signed Terms of Business to us, you will not be able to withdraw our authority to represent you until either you have been compensated or the Ombudsman has decided your case.

Can they get out of it? Term 4 seems to contradict itself?