Winterthur Life Endowment Policy Concerns

dunstonh

I wouldnt go down any template letter route.

1 - The FOS have acknowledged that template letters appear to have a lower success rate than personalised letters
2 - Template letters can trip you up if you include things which are easy for the other party to show you are wrong. With many decisions requiring a balance of probability decision (no proof either way), the side which is most credible often wins.
3 - The person handling the complaint at the other end is likely to be more cynical about a template letter than they are a personal letter. Template letters are associated with fraudulent and try-it-on complaints. If the complaints handler gets a template letter that is identical to 5 others they have had that week then you are putting them in a negative frame of mind straight away. i.e. here comes another try-it-on.

ef. Which? It begs the question of suitability ref. their letter templates when making a complaint about endowment mis-selling i.e MSE recommends them, even providing a link

This site dumbs down. A template letter caters for the individual that doesnt have the ability to write a simple complaint letter for themselves. The view being a template letter is better than nothing. It does also play a bit toward the try-it-on individuals. The site is prone to encouraging people to tell porkies at times. Not officially but certain people posting in the forums have the view that you may as well complain as you have nothing to lose. To help you where are some reasons you can try and use which have known to be successful... that sort of thing.

Deal_Surfer

Thanks again dunstonh – secretly, I was hoping you would intercept my post as I’ve seen loads of brilliant advice from you on the forum.

I’m going to review all of my original paperwork (provided by the Financial Advisor) to see if I have a genuine reason to make a complaint. I’ll post anything, which I think validates my concerns, to see if you or anyone else agrees with my findings.

I don’t want to be perceived as a try-it-on and depending on whether or not I take things any further, I will undoubtedly write a personalized complaint letter – thanks dunstonh!

Deal_Surfer

O.K. dunstonh and co. – here’s some extracts of the Financial Advisors letter and my reasons for believing that I might be able to complain about being mis-sold an endowment policy. I would be very grateful if you could review the information and give me an idea of where you think I stand:


Dear xxxxxxx

Planning for a Secure Future

The purpose of this letter is to summarise the measures that I have recommended to you…etc. etc.

Your Overall Requirements

Intention to buy…deposit available…payment protection options…etc. etc.

Mortgage Type

Mortgage amount and recommended provider i.e. Halifax Building Society.
Term length (25-years).
Fixed interest rate value and period of time.
Relevant Mortgage Fees

Interest Only Mortgages

I recommend an interest only type mortgage. This means that your monthly payments will be made up of interest only.

My reasons for recommending this type of mortgage to you are:

- You have told me that you may be moving home in the future.
- You suggested that the possibility of early repayment of your mortgage would be of interest to you.
- You suggested that the possibility of receiving a cash lump sum at the end of the mortgage term would be of interest to you.

As I have recommended an interest only type of mortgage, you will need to arrange a facility to repay the loan at the end of the term. I also strongly recommend that you arrange a full package of measures to protect this mortgage.

Protecting Your Mortgage

Payment protection options discussed and agreed to etc. etc.

Your Attitude to Investment risk

You have indicated a preference for a balance of investments offering some security combined with growth and/or income.

POLICY RECOMMENDATIONS

In the case of any of the combinations of benefits I have recommended resulting in the minimum premium for that policy applying, you will recall that we discussed the options available to you.

Where, in view of your circumstances, I have recommended that you do not increase your cover, with HomeProvider, HomePartner and HomeHealth, the extra amount will be used to buy additional units.

There is no advantage to be gained from not increasing cover on a term Assurance policy.

HomeProvider

Having discussed other methods of repayment such as PEP’s and personal pensions, I recommend a Winterthur Life HomeProvider policy with Life Cover of £41,956 and a term of 25 years.

The level of cover I have recommended is the same as the total amount being borrowed.

The term of the policy should be the same as the term of your mortgage.

In view of your balanced attitude to investment risk, I recommend we assume a unit price growth rate of 6.75% when calculating your premium.

You have chosen to invest your premium in the Unit Fund. Details of this fund are available in the HomeProvider product guide.

Investment growth will be passed on to you by an increase in the value of the units you hold. You should be prepared to see the value of the units you buy rise and fall as investment performance varies.

Critcial Illness Option

Payment of mortgage if I became seriously ill etc. etc.


Reasons for recommendation

My reasons for recommending this policy are that:

- I have recommended an interest only type mortgage and you will need an arrangement to repay the loan at the end of the mortgage term and also protection so that your mortgage would be repaid if you died or contracted a serious illness.
- You have told me you are likely to move home again in the future and HomeProvider can be used as security for a future mortgage when you move home so that the term of the new mortgage need only be as long as the term remaining on this policy.
- If the policy performs well, you may be able to repay your mortgage early and save money.
- If the policy performs well, you may receive a cash lump sum, the tax having been paid from the fund.

Important Information

Your premium will be paid to Winterthur Life in addition to the monthly amount that you pay to Halifax Building Society. Your premium will be invested with the aim of building up enough money to repay your mortgage at the end of the term.

Winterthur Life will review your HomeProvider policy regularly to ensure that the value is increasing at a rate sufficient to repay your loan. If, at a review, it is felt that a shortfall could occur, you may be advised to increase your monthly premiums.

Details of this policy are provided in the HomeProvider Key Features documents and product guides which I have given you.

HomePartner

Replacement of income if my income was lost or suspended because of ill health or disability…etc. etc.


Important Information

Winterthur Life will review the progress of your plan every five years to check that your chosen level of cover can be maintained…etc. etc.

Accident, Sickness and Unemployment

Unemployment cover cost…etc. etc.

Summary

Products discussed and relevant costs etc. etc.

The package of measures you have chosen to proceed with are as follows:

Interest Only mortgage with Halifax Building Society, interest rate 5.95%, fixed until 30/09/1999.

Monthly Payment to the Lender £185.72

A HomeProvider with:
Life cover of £41,956
Critical illness cover of £41,956
For a term of 25 years
(assuming a growth rate of 6.75%)

Monthly Premium £72.48

A HomePartner with:
Health insurance providing xxxxxx with £585 per month after a deferred period of 13 weeks with Escalation of Benefits

Indexation
For a term of 41 years

Monthly Premium £13.46

Total Monthly Outlay £271.66

You have indicated to me that these recommendations are acceptable to you and that you wish to proceed with them.

Recommended Quote Ref no. xxxxxxxx
Accepted Quote Ref. no. xxxxxxxx


Yours sincerely

xxxxxxxxxxxx
Representative of Winterthur Life
xxxxxxx & Associates Ltd.


My reasons for believing that I might be able to complain about being mis-sold an endowment policy:

1. I was not given any comparative figures based on an equivalent Capital and Repayment Mortgage i.e. so I had a clear choice of the monthly financial commitments for each mortgage option, along with the pros and cons of each mortgage type.

2. I was ‘more or less’ aware that an endowment was a risk, but was not given clear or sufficient advice by the Financial Advisor, that I may need to increase my monthly premiums if my endowment policy wasn’t doing well i.e. the brighter side of the policy was emphasised, such as potentially paying of my mortgage early or gaining an extra lump sum at the end of the term. In hind-sight, example calculations of what I might need to pay extra per month part way through the policy (to prevent a shortfall), as well as what I might get back depending on growth levels, would have given me a better understanding of the risk I was taking and any implications associated with it.

3. I was not told what would happen or the choices available to me, in the event of an endowment policy shortfall by the end of the term.

4. As I was a first time Buyer in my early twenties, I strongly believe that I was encouraged to ‘go down a certain route’ by the Financial Advisor in question, as I had little understanding or previous experience of the mortgage market (let alone any investment risk knowledge).

5. I was not told or given any clear information about how the endowment policy would be invested. In the Financial Advisors Letter, he states ‘Details of this policy are provided in the HomeProvider Key Features documents and product guides which I have given you’. Other than the above follow-up letter and a few hand scribbled graphs and notes on several pieces of plain paper that were given to me during the meeting, I do not recall being given any formal Winterthur Life documentation. I certainly don’t have in my possession a copy of my signature confirming receipt of such information? Ironically, I did receive a Policy Conditions HomeProvider booklet and a Key Features insert sheet with my Homeprovider Letter of Acceptance i.e. after the Financial Advisor had already sold me the policy…

6. Finally, the Financial Advisors projects of an ‘assumed’ unit price growth rate of 6.75% to reach a target amount of £41, 956 and Winterthur Life’s ‘Letter of Acceptance’ projections of 7.5% to reach £43,000, but I’ve since had that confirmed by dunstonh and Annisele there are genuine reasons why there may be a discrepancy between the quoted and final policy figures.

Chinkle

OP, despite yet another long post, I fail to see anything in it which points to mis-selling, but you seem determined to go ahead with such a claim. Perhaps you'll be kind enough to come back on here and gloat when you do get your claim upheld.

cobblerboy

I am in a similar situtation to deal surfer but what I find frustating is that I can not find the current performance of my
winterthur life endowment I am just quoted the current fsa 4%,6%,8% growth rates which are of no help when trying to
work out a solution to the problem of shortfall or even if there is a problem! Would much apprieciate if anyone knows of
where I can find this information out
cheers

kingstreet

I'm quite familiar with the workings of Provident Life, later Winterthur Life through the 1990s and upto 2001 when the firm ceased its estate agency ties. My former partner was an adviser with a firm tied to them.

IIRC, Winterthur used two different terms for the same thing. The investment rate of return of 7.5% and the growth rate of 6.75% were (a bit hazy here!) effectively the rates gross and net of charges.

During the fact-finding process and in preparing a recommendation their document had two final sections. The first contained around ten different statements from attitude to investment risk through the purpose and implications of policy reviews to the difference in costs of different mortgage repayment methods. Each borrower and the adviser had to initial the three boxes next to each statement to indicate the matter had been discussed and understood.

In addition, a free-format paragraph could be appended to fact-find and a free-format paragraph added to the end of the suitability letter to reflect anything which had been discussed which didn't have a statement and initial box.

I did have several of these I used to use for training (I crib everything!) after she left but they were binned in our last move.

I would suggest that the OP consider writing to Winterthur and making a subject access request under the DPA to get a copy of the factfind if he doesn't already have one as it is this which will be most helpful in determining if there is a question mark over the advice.

To cobblerboy - get the number of units you hold from your latest statement and get the bid price of the Unit Fund to calculate the policy value on any given day. The number of units will increase over the year as you pay each premium but this should give you an approximate value. The price doesn't seem to be available on their site, so I've emailed them and I'll post it in this thread when it arrives.