Why are some endowments so much worse than others?

mayb_2

I]The OP was certainly sold a savings plan with high charges which has done very poorly, and such products (pensions as well) were very common in those days: there are still quite a few around now.
But it's a difficult one as she hasn't made a loss and it's not clear that the policy was actually unsuitable for her needs. [/I]

May I sugest you visit the thread linked below to refresh your memory on my situation EdInvestor. Whilst I certainly agree with your first statement quoted above and have thanked you for it, I have more than a small argument with the second one.
http://forums.moneysavingexpert.com/showthread.html?t=299974 (Missold Endowments not attached to a Mortgage)

If my need was a pension as stated by the CIS then this certainly was not suitable for it was it?
These fixed term savings were not intended to be pulled in and out of - we were told how important it was to stay in there for the full term as a large sum of money would be paid as a terminal bonus. Next to no terminal bonuses are being paid by the CIS on these plans.

I didn't find out about the savings plan I had until there were only 4 years left to run on it. I was promised 30,000 and would have received less than 11,000 if I had continued paying for the next 4 years. In the end we received about 7,000 but only after we had continued paying another year's premiums. Bear in mind I would have paid them about 9500 in premiums to receive this princely sum. So I have 3 years left to make up this shortfall in our planned return. This money, as you know, was intended to purchase a pension for me. Any ideas anyone as to how I am to achieve that in 3 years?? Don't forget I am also paying for the shortfall in my mortgage that also needs paying before I retire. Your definition of a loss is very different from mine and I suspect everyone elses who is on the loss side of this equation and talking on this site. I was most certainly missold this product and didn't get a penny in redress for it.

And dunstonh your statement Endowments were not mis-sold to the degree is made out. The redress proceedure that was chosen was a disaster and made it a free for all. It doesnt matter if you were mis-sold or not, you can complain about having an endowment and if the documentation wasnt up to todays levels it usually results in redress paid. Its free money in many people's eyes. They have nothing to lose so put the complaint in.

....has probably left many of those left with shortfalls in their mortgages and savings speachless!!! Where did you get this information that all of these people who were not missold are getting redress. How do you know the ins and outs of all of these claims. This is pure conjecture and certainly not bourne out on this site.

I quote Martin here
Millions have now ended up with a shortfall, meaning not only do you not get a lump sum, but the end result is the investment isn’t even enough to pay off the mortgage it was intended to.
My view is the financial services industry is culpable for this problem. Endowments paid large commissions to advisers. They weren’t transparent. Worse still, to make them look cheaper than repayment mortgages, the payment amounts were often set up at a low level, hoping for unrealistically big investment returns.

How are your own finances you IFA's? I would hazard a guess that they are probably a lot better than mine. The CIS - the company involved in this particular peice of skullduggery are not doing so badly either are they- financially speaking? Having amalgamated with the banking side of their business and making large profits on their internet banking they are doing very nicely thank you too.

Are you the best people to take note of, with regards to 'compensation culture, nanny state, if you don't understand the product don't buy it type comments as you don't appear to be in the same boat or even the same sea as the rest of us - or perhaps I am being too harsh here?

dunstonh

How are your own finances you IFA's? I would hazard a guess that they are probably a lot better than mine.

Probably are but what has that got to do with it?

The CIS - the company involved in this particular peice of skullduggery are not doing so badly either are they

What has that got to do with IFAs? We cant sell CIS products and wouldnt want to either as they are generally very poor quality.

....has probably left many of those left with shortfalls in their mortgages and savings speachless!!! Where did you get this information that all of these people who were not missold are getting redress.

You will not find a single statement from me saying that they were not all mis-sold. However, it is generally regarded now that it has become a free for all whether mis-sold or not and the people handling the claims are noticing a number of false claims.

How do you know the ins and outs of all of these claims. This is pure conjecture and certainly not bourne out on this site.

I control the compliance for my company and attend regular meetings discussing compliance issues and at those meetings have been representatives of the FOS and those that handle endowment complaints. Both stating that they see many false claims. Most of which come via certain claims companies.

Even MPs are starting to consider reducing the ability to claim or putting in clauses because of the level of fradulent claims.

dunstonh

....has probably left many of those left with shortfalls in their mortgages and savings speachless!!! Where did you get this information that all of these people who were not missold are getting redress. How do you know the ins and outs of all of these claims. This is pure conjecture and certainly not bourne out on this site.

This site is not exactly guide for balanced discussion. I control the compliance for my company and I attend meetings to discuss compliance issues. At those meetings have been representatives from the FOS and the complaints handlers who have stated and given examples of false claims and they have stated that its on the rise.

Even MPs are considering putting in a penalty or fee for making a claim due to the level of false claims that are occuring.

How are your own finances you IFA's? I would hazard a guess that they are probably a lot better than mine.

They probably are but whats that got to do with it?

The CIS - the company involved in this particular peice of skullduggery are not doing so badly either are they- financially speaking?

Whats that got to do with IFAs? CIS products are generally quite poor and you wont find IFAs recommending them.

or perhaps I am being too harsh here?

Harsh? no. But it does come across as bitter. Especially as you are complaining about IFAs when you have never been sold a product by one.

mayb_2

A few points here dunstonh - I am not complaining about IFA's in relation to my CIS claim - you did not by the way suggest there were any particular problems with the firm when discussing this with me on other threads about the claim I was making against them. Now suddenly they are generally quite poor and you wont find IFAs. recommending them. . However, it was an IFA who sold us our Mortgage Endowment - which also performed even poorer than most - so I feel intitled to an opinion on that one too.

The high commission paid on these was obviously of financial benefit to the IFAs selling them and had more to do with their recommendations than suitablility for the client. So I think the financial situation of IFA's is relevant here.

If the Ombudsman is talking about false claims I would have to assume he is not allowing them. He certainly in my experience didn't allow my genuine one so I tend to think this is a non argument. People cannot be benefiting from false claims unless they are being paid. If it is known these claims are false they are not being paid and therefore the 'free money' spoken about can not exist.

I am sure governments and Ombudsman and the financial services industry will try to bring in as many off putting fines, time limits and anything else they can bring in to stop people claiming. It is recognised that the time bars introduced will result in a large number of people putting in their claims now -and that could be oh so expensive if they have to be paid.

Bitter, cynical and probably angry, dissapointed and cheated too - yes I am probably all of those things and more. I wonder how that happend? Anyone else out there feel the same way? In case you are wondering, I do have days when I am happy, and don't think of my finances for whole hours at a time.

The industry does not deserve our confidence and the pensions crisis is a prime example of what can happen when that confidence is lost. Rather than continuing to try to avoid the results of this misselling the companies could have engaged in an early process of interaction with their investors which may have helped people to understand what had happened and how to address the problems.

Without the involvement of the FSA where would we be now - and they are motivated more by protecting the industry than protecting the consumer.

Rather it would appear many of them prefer to argue each case as it comes and make things as stressful, complicated and difficult as possible. Trying to put the blame on the consumer for their own predicament just isn't on.

I sugested on one thread that people post the names of those companies whom they felt had dealt fairly with them over misselling and so far there is no one on that list.

EdInvestor

Endowments were not mis-sold to the degree is made out. The redress proceedure that was chosen was a disaster and made it a free for all. It doesnt matter if you were mis-sold or not, you can complain about having an endowment and if the documentation wasnt up to todays levels it usually results in redress paid.

Or if the documentation has been lost or destroyed, as it often has.

It's up to the company to show the sale was fair, quite rightly.If it is stupid enough to destroy its own supporting evidence, then that's its problem. It's quite wrong to suggest this is policyholder opportunism.

When you talk of opportunism, how many IFAs have used loopholes in the law to shift potential misselling liabilities into vehicles that have been closed, so they can avoid paying the redress and shift responsibility onto the FSCS?

Perhaps a bit of own industry house cleaning might be indicated first before attempting to blame innocent policyholders....

EdInvestor

I can't help thinking the OP might be a bit confused about events relating to her case, perhaps not suprisingly as it's nearly 15 years ago.

For instance she says:

We had no information regarding our own policy until two years ago when we made enquiries after receiving a warning following a payout on another policy.

...but she also says...

We saw the Agent on a regular basis therefore, and often discussed this policy with him, we told him how please we were that we had this savings plan when there were so many problems out there with people's mortgages ...

and elsewhere she says

We paid our premiums in cash/cheque to an agent of the company who visited us every couple of months and signed our payment book.

and

This was a joint policy and we paid this one by Direct Debit (there was no alternative on this policy) although we paid all our other policies by cash or cheque to our Agent at the door and he signed a book as proof.

In the light of the inconsistencies, it does seem possible to me that the FOS adjuicator might have felt that there could be doubt about her memory when she says this:

We had no warnings of risk - no paperwork to support this - no information over the 10 years we paid into this apart from one bonus certificate in 1998....

It just doesn't look quite as clear-cut as the normal successful claim.

dunstonh

Or if the documentation has been lost or destroyed, as it often has.

That is very often the case. Firms had never seen the need to go to the files in the past to that level and the way the paperwork was treated over the years reflected that. Loads of endowment complaints are not upheld but paid redress due to lack of supporting documentation.

It's up to the company to show the sale was fair, quite rightly.If it is stupid enough to destroy its own supporting evidence, then that's its problem. It's quite wrong to suggest this is policyholder opportunism.

I agree its down to the companies involved here.

When you talk of opportunism, how many IFAs have used loopholes in the law to shift potential misselling liabilities into vehicles that have been closed, so they can avoid paying the redress and shift responsibility onto the FSCS?

What has that got to do with the discussion here?

Perhaps a bit of own industry house cleaning might be indicated first before attempting to blame innocent policyholders....

Its typical of this site to not be able to highlight issues and balance the debate without people taking your comments to extremes or twisting into other things.

Were some people mis-sold endowments? - yes
Are some people getting paid redress when they shouldnt? - yes
Are some people getting no redress when they should? - yes
Are some people making fraudulent claims? - yes
Is the redress method flawed? - yes
Has the redress method done more damage than good? - yes
Who is to blame for endowments failing? - insurance companies, the regulator, the advisers, the consumers, The Govt, The world economies.

The consumer has to take some of the blame as the majority knew damn well it was stockmarket invested. However, like mortgage buy to lets now, as endowments had never failed in the past to pay big surpluses, they went along with it as the monthly payments were usually lower and there was the potential for lump sums at the end.

The endowment issue is not all black and white. The consumer isnt the angel and the financial services industry the devil. There are lots of shades of grey here as well as the black and white cases.

Ian_W

EdInvestor wrote:

Trying to keep it simple...;)

Wow Ed, you could have fooled me! :rolleyes:

As Peter Kay says,
What's all that about?

EDIT: Ignore this comment Ed has now removed 3/4 of the post I found so confusing - perhaps she did as well!!

EdInvestor

The endowment issue is not all black and white. The consumer isnt the angel and the financial services industry the devil. There are lots of shades of grey here as well as the black and white cases.

On the whole I agree with this - not least because pretty well everyone who purchased a property on an endowment mortgage is currently sitting on a massively appreciating asset which has gone up in value by many times their endowment shortfall.

There are other types of misselling ( especially where retired people who cannot easily replace lost capital are involved) that I tend to take rather more seriously,as you know.

mayb_2

[QUOTE=EdInvestor]I can't help thinking the OP might be a bit confused about events relating to her case, perhaps not suprisingly as it's nearly 15 years ago.

For instance she says:
We had no information regarding our own policy until two years ago when we made enquiries after receiving a warning following a payout on another policy.

..but she also says...


We saw the Agent on a regular basis therefore, and often discussed this policy with him, we told him how please we were that we had this savings plan when there were so many problems out there with people's mortgages ...
and elsewhere she says

and so you go on

In the light of the inconsistencies, it does seem possible to me that the FOS adjuicator might have felt that there could be doubt about her memory when she says this:

It just doesn't look quite as clear-cut as the normal successful claim.[/QUOTE]

Lets just paste in all of that statement and see how it looks now shall we?

[I]We saw the Agent on a regular basis therefore, and often discussed this policy with him, we told him how please we were that we had this savings plan when there were so many problems out there with people's mortgages etc. We asked if we could add to it or take out another one we were so sure of it. We were told no to both of these requests but never told that actually you haven't a hope in hell of getting your money.
[/I]

Well EdInvestor you certainly did a cut and paste on that one worthy of a Sunday newspaper! Or perhaps you are the one confused.

The Ombudsman spelled out our case very clearly back to us once we had made our complaint and we all agreed on the basis of it before he took it forward. So no he wasn't confused. We supplied evidence to back up all our claims which was more than the CIS could do. They did not keep paperwork from that time and they could not get a written confirmation from the Pensions Agent or our regular Agent to confirm what they had done.

If you rememberthe Ombudsman will not consider a complaint about the performance of a policy. So it cannot have been that we were complaining about or it would have been thrown out.

We didn't receive any information from the company or the visiting agents about our plan- they collected money for other insurance from us at the door and we paid for our savings plan and our pensions through the bank. Two different issues here.

We did often tell these visiting Agents how glad we were to have this policy etc etc and they failed to use this oportunity to advise us that we had a dud here and were living in cloud cookoo land. The point I was trying to make (and obviously failing miserably as far as you are concerned) is that they had every opportunity to disabuse us of our fantasy and didn't do it. No we were not having an informed discussion on this, leaving us very clear as to the current position as you are attempting to imply.

I would also point out that both the CIS and the Ombudsman agree that there was a distinct lack of paperwork relating to this sale and in the light of that he made his decision based on his own experience of such policies! The CIS has confirmed that we did not receive any bonus certificates - which should apparently have been delivered with the visiting Agents.

By the way are you suggesting that there have been successful claims for missold with profits policies, savings plans in the past (we are not talking about mortgage endowments here in case you are confused). Now those I would like to hear about.

ps wasn't it you who asked me for the figures relating to this and told me I had bought a very poorly performing policy with a very low final bonus etc etc. Or am I confused yet again. Of course I am not quoting here as it was on another thread and it might confuse everyone else.

I am beginning to think I must have hit a nerve somewhere along the line.

From mayb not attempting to keep it simple at all - and not attempting to discredit anyone either.