CIS Endowment Maturity amount? & Miss-sold?

kevinthecaravan

My wife took out a CIS 15 year with profits endowment a few months before we met in 1996. We kept it up as we planned to use it to pay off some of our mortgage and as the CIS guy had suggested she should expect at least £15,000, seemed a good idea. It is due to mature early next year and we today called them to try to get an idea of how much to expect. Firstly we had a battle getting an idea of how much the terminal bonus would be and when we were told we now hope they got it wrong. This is because my wife was told when she bought the policy that the terminal bonus would be at least 50% of the sum assured. We therefore expected about £4000 but were today told that it was about £500!

Does anyone know what the current 15 year with profits termainal bonus rate is for CIS?

If the £500 is right, we would have been better off puting the money in the bank as it equates to a retunr of 0.95%!

Secondly, was my wife miss-sold? When the policy was sold, she was single with no dependants and no debts, living with her parents.

Thanks.

S

dunstonh

Does anyone know what the current 15 year with profits termainal bonus rate is for CIS?

Not very good. Although that isnt a surprise given events of the last 15 years. Plus, the policy was obsolete at the time although tied agents kept using them up to around 1998.

If the £500 is right, we would have been better off puting the money in the bank as it equates to a retunr of 0.95%!

Thats the risk you take when you invest. In most periods you can gain a lot of money but in some you can get very little or even a loss.

Secondly, was my wife miss-sold? When the policy was sold, she was single with no dependants and no debts, living with her parents.

None of those are grounds for mis-sale. The product sold was a savings endowment and not a mortgage endowment (latter could be grounds for complaint).

Dick_here

The most recent bonus info from them is here:
http://www.cfs.co.uk/servlet/Satellite?c=Page&cid=1231227546245&pagename=Corp/Page/tplCorp&currart=1254465389936&currmth=10

Never mind what you were told at the time, haven't you paid attention to the annual bonus statements ?

kevinthecaravan

Yes we have taken notice of the bonus statements, but they do not include any information regarding terminal bonuses.

With regard to the question about being miss-sold. Is it not the case that the provision of life assurance carries a cost, which would not have been the case with a pure savings plan? Why did a single person with no dependents need life cover?

kevinthecaravan

I have just looked at the link provided, so thanks for that. I had already found this and was hoping to find similar facts regarding a 15 year policy.

I have also just dug out the bonus statements and the first 2, 1996 1997, include terminal bonus examples which are 86% and 91% of the sum assured. Then this stopped. I guess this is when the returns went into the toilet. It's a shame that we now feel let down by CIS, as we have our house and car insurance with them and also switched our kids savings to Britannia when the merged. We probably won't be so keen to keep doing business with them in the future.

At least we didn't make a loss. Well let's hope not, it hasn't matured yet!

terryw

I have a CIS endowment due to mature in two years, and yesterday I rang to ascertain the current value. I was told that terminal bonuses were no longer being paid but it was hoped that they would be reinstated in the future.

dunstonh

With regard to the question about being miss-sold. Is it not the case that the provision of life assurance carries a cost, which would not have been the case with a pure savings plan? Why did a single person with no dependents need life cover?

The life assurance is minimum on a savings endowment and bonuses are added to it as a guaranteed sum assured. The provision of life assurance, even though very small, also what qualifies there to be no tax to pay on maturity. If it had been a mortgage endowment then your argument would be correct. However, not with a savings endowment.

When you use a tied sales rep like CIS, they only have to recommend the most suitable product in their product range. That gives them a lesser remit than an IFA. As the savings endowments were their most suitable product then that is what they offered. If an IFA had recommended it then you would have scope as the IFA could have done a regular contribution PEP. Tied companies often got round this by setting their minimum PEP contribution at £100pm but their savings endowment at £20pm. Anyone paying under £100pm couldnt do their PEP so the savings endowment was best by default (in their product range).

kevinthecaravan

Thanks. With regard to bonuses, I was told that the current terminal bonus rate is £7.80 per £100 sum assured.

With regard to the tied agent not having an alternative product ro recommend, does this not mean that the agent should have not recommended anything and suggested that their client seek advice elsewhere?

dunstonh

With regard to the tied agent not having an alternative product ro recommend, does this not mean that the agent should have not recommended anything and suggested that their client seek advice elsewhere?

No. The tied agent remit is to offer the most suitable product in their range. The only time they should refer you to an IFA is if they do not have a product that can meet the need at all and would be unsuitable. Savings endowment, whilst not very good, was suitable.

It's the same nowadays. You go to Lloyds and Scottish Widows range of products they offer is not the full range available to IFAs. In most cases, the charges at Lloyds are higher than what an IFA can do as well. They can only offer you what they have available and it doesnt matter if there is better or cheaper elsewhere.

terryw

kevinthecaravan wrote: »

Thanks. With regard to bonuses, I was told that the current terminal bonus rate is £7.80 per £100 sum assured.

Who has told you this and you have you a link?

thanks very much.

Froggitt

kevinthecaravan wrote: »

my wife was told when she bought the policy that the terminal bonus would be at least 50% of the sum assured.

There is your misselling grounds. If you have it in writing or can prove this in some way, your case is home and hosed.

If its your word against theirs......theyll deny it and youll go to the Ombudsman and who knows.

Im out of date on this......are misselling claims now timebarred?