Advisor appears to have tampered with original documents

dunstonh

Can you clarify something. Was the replacement endowment cheaper than the original plus a top up and over the same term (i.e. not extended by a number of years)? If the new plan is better, then cancellation of the old plan is acceptable and to be encouraged. If the new plan is worse, then its a mis-sale. Cancellations should be documented and its where many advisers do slip up (or rather used to slip up).

Tiggs, I have taken to issuing suitability reports prior to sign up. By having the recommendation report in your hands prior to signing the application, with it showing pros and cons, it just adds that little more protection.

matto

If the new plan is better, then cancellation of the old plan is acceptable and to be encouraged

Surely all with-profits policies were the same, or at least should have been considered the same. OK so we now know there are some good and bad policies but I don't believe this was true at the time and ironically now all providers are forced to use the same projection criteria. Just to say your particular policy is better than someone elses on the grounds that you say it will perform better shouldn't be considered good advice.

dunstonh

Surely all with-profits policies were the same, or at least should have been considered the same. OK so we now know there are some good and bad policies but I don't believe this was true at the time and ironically now all providers are forced to use the same projection criteria. Just to say your particular policy is better than someone elses on the grounds that you say it will perform better shouldn't be considered good advice.

We know now that they arent the same and performance is not grounds to churn. However, if the replacement plan was cheaper and/or had a better target growth rate (i.e. more is going into the investment element) then it could be good advice.

You should see the documentation in my suitability letters when I switch people out of Pearl or Phoenix plans. It slates those companies and you can easily justify moving those out. I have moved out people who have lost £20,000 in the process. Still justifiable with the right evidence and documentation (and proven to be the right thing to do so far with most of those having already covered the loss whilst the old providers are still on zero bonus). All that said, there is usually a whole page with risk warnings and important information which highlights all the things which can be negative on a switch.

It is fair to assume that modern standards would not have applied to cases sold in past. You would not expect to see pages of all the issues back then as you would expect now. However, something should exist and if the reason stacks up, then there is no problem. If it doesnt stack up, then its a valid complaint.

If the premium was lower and the target growth rate was at least the same or lower and the term not extended and the sum assured higher, then it could be a valid reason to surrender. This is of course comparing it with keeping the existing plan and taking out another to cover the difference.

vinno65

Hi Crazysaver,
Just one other question was the new policy for 24 years seeing as how the old one had run for a year or was it for 25 years aswell?

Dunston "It generally considered that people will forget around 70% of what is told to them in an area they know nothing about" what science is this based on!?

regards Vinno

defender_of_the_weak

Modern standards are nothing new. Good advisers were doing this in the
1980's providing reports and documentation for clients to explain the course of action recommended and the potential pitfalls if any existed. sadly they were heavily outnumbered by the salesmen who were more interested in hitting target than anything else

Crazy_Saver

Can you clarify something. Was the replacement endowment cheaper than the original plus a top up and over the same term (i.e. not extended by a number of years)? If the new plan is better, then cancellation of the old plan is acceptable and to be encouraged. If the new plan is worse, then its a mis-sale. Cancellations should be documented and its where many advisers do slip up (or rather used to slip up).

I can find no reference at all to any enquiry into a top up.

Both the quotes that the advisor has done and documented on our behalf are with new insurance companies and seem to be for the full £60k

the policy that we surrendered was taken out with Reliance Mutual. commenced on 21.8.87. Premium £73.49pcm. 25 year term. To cover a £48k mortgage.

The new endowment was for 25 years taken out in Sept 91 with Eagle Star for a £60k mortgage. Premiums £71.20pcm. This is currently showing a shortfall of around £32k

the advisor also arranged a quote from Commercial Union which she says we deemed too high at £80.10pcm.

OHHHHH WHAT A MINEFIELD OF FACTS AND FIGURES!

Crazy_Saver

Hi Crazysaver,
Just one other question was the new policy for 24 years seeing as how the old one had run for a year or was it for 25 years aswell?

No. Old 25 year policy had run for 4 years. New policy was for another 25 years.

matto

What happened to the "lump sum" from the cancellation of the original endowment policy?

I still don't see that at the time there was such a thing as a better endowment policy. I know when I took out my top-up endowment I was offered a Homeowner or Homeowner Plus policy. The difference between the two was the rate of return used and I chose the Plus policy which used lower rates of return so the monthly payment was higher.

dunstonh

Modern standards are nothing new. Good advisers were doing this in the
1980's providing reports and documentation for clients to explain the course of action recommended and the potential pitfalls if any existed. sadly they were heavily outnumbered by the salesmen who were more interested in hitting target than anything else

Good point. Perhaps as there are less of the "bad sort" now with declining numbers of salesforces etc, that those with the higher standards are starting to be noticed more.

No. Old 25 year policy had run for 4 years. New policy was for another 25 years.

That could be the clincher for you. If you extend the term then of course its going to be cheaper. It has to be the same term or less. That extension would need to be justified and that is unlikely to be the case. It would have been cheaper to have the mortgage split with the orignal amount on the original term and the top up mortgage on terms that were acceptable to you then.

I still don't see that at the time there was such a thing as a better endowment policy. I know when I took out my top-up endowment I was offered a Homeowner or Homeowner Plus policy. The difference between the two was the rate of return used and I chose the Plus policy.

An endowment is a generic term for a plan with an array of options. The premiums could be affected by charges of the provider and the target growth rate of the plan. These options could often be influenced (more so the target growth rate) by advisers. So, with everything else the same, a plan costing £80pm with a target growth rate of 5% is better than a plan costing £80pm with a target growth rate of 7.5%.

Crazy_Saver

What happened to the "lump sum" from the cancellation of the original endowment policy?

I really cannot remember ever seing it. I'm assuming that it went towards paying legal costs etc. We did pay a £5k deposit on the new property so it could have been used there in someway.