Mis-sold endowment claim, where now?

hiljam

I have been told by the FS Ombudsman that they cannot pursue my claim for compensation as the Adviser who sold me the policy is no longer trading and was a member of FIMBRA. I don't know WHY that makes any difference (don't particularly NEED to know now!) but they said I would have to pursue my claim "through the courts".

Can anyone tell me where I go now?? Am I likely to be successful? What sort of solicitor deals with this?

Any help gratefully received, I just keep going up cul-de-sacs!

Froggitt

I thought there was a "Financial Compensation Scheme" (somewhere in the FSA) for cases where your IFA is no more. This I think applies to post 1988 policies only.

Im not sure who you would be expected to pursue thru the courts.

Frog

dunstonh

Basically, companies like my own pay each year into a pot. It costs me £1800 and that goes towards the FSCS. This is to pay for firms which have gone under/closed etc since 1988.

This is where the money comes from and why there is a date involved.

I dont know if anyone has ever been successful pursuing it through the courts.

elephant_guy

Dunstonh

Can you answer a question on the same theme. I bought an endowment in June 1988 which was mis-sold by an IFA who later went out of business. I have been told that the Financial Services Compensation Scheme will only deal with endowments sold after August 1988 (2 months after my purchase !!). Is this true ?

Is there any way of persuading the FSCS's to deal with the complaint ?

If the IFA was paying into the FSCS prior to going bust, would this extend the parameters over which the FSCS would be willing to consider a complaint ?

Any advice would (as always) be greatly appreciated

Elephant_Guy

Compensationitis

Good grief, so much misinformation in one thread...

If the IFA resigned from FIMBRA before 1st April 1996 there is nothing anyone can do for you, period.

Not the FSA, not the FOS and not the FSCS, not even the Pope.

Now we have Elephants too, why did the FSCS say that then? can I have a copy of their letter faxed to 0845 4585299 And I'll get on the case PDQ.

Added: Dunston, that's cheap, wait until the next fee fest and then the next one! If you are the last one paying into the pot and you are unincorporated you need to move to Brazil or Israel ASAP.

elephant_guy

Sorry Compensationitis.... Didn't make myself all that clear....Apologies.

I have been told by my endowment company (Standard Life) that they are not liable for the mis-selling of my endowment as it was sold by an IFA. SL state in the same letter that the IFA is now no longer trading/no longer authorised to give financial advice.

I had read somewhere that if the endowment was sold prior to August 1988 that there was little chance of compensation. My post was made in order to gather as much information prior to writing to the FCSO.

Thanks for clearing things up for me..........

So........ How can someone find out if an IFA left FIMBRA before or after 1st April 1996 ? If the IFA was still a member after this date will the FCSO then deal with the complaint ?

Now I know why I could never be a financial advisor

Elephant_Guy

dunstonh

Added: Dunston, that's cheap, wait until the next fee fest and then the next one!

Got it through the other day. £1920 for this year.

If the IFA was paying into the FSCS prior to going bust, would this extend the parameters over which the FSCS would be willing to consider a complaint ?

No.

Generally, IFAs pay an insurance policy to cover them for each year they trade. This is known as PI cover. Unfortunatly, the system is that this PI cover doesnt cover policies sold in that year. It covers the firm/advisor for the year the claim may be made. So, if an IFA trades for 20 years and pays 20 years PI cover but then retires and closes up (lets assume sole trader here), he still has to pay PI cover afterwards even though he is not trading any more in case a claim comes in later. Or he can take the risk and have to face personal liability which i believe is upto £100k per claim now.

The FSCS is paid into by current advisors/firms to cover those that are no longer trading or have managed to con everyone by closing up as one name and relaunching under another and dumping all their old claims liabilities on to the FSCS.

Compensationitis

The FSA or the FOS can tell you when an IFA became a 'departed firm' and from you have said they have already come to the conclusion that there is nothing they can do.

The PI issue is invariably irrelevant because there is no market in run off cover.

The FSCS will not pay out on endowment claims because they are a projected loss, not an actual loss.

Your only course of action is a civil claim.

OR you could tackle Stadard Life for misreperesentation of risk due to inapropriate charges being used to set the premium. I'm about to call them about one such case, will let you know what happens.

Compensationitis

Well I am stunned , not.

The premium at outset was £36.24 using LAUTRO charges.

Had they used their own charges the premium would have been £40.16

When you think it through this 25 year plan had virtually NO chance of meeting the expectations of the policyholder and if smoker rates had been used the difference would have been much bigger, would you believe that LAUTRO rates did not take account of smoker rates?

£3.92 x 12 x 25 = £1,176 so add some investment growth and you have an inbuilt shorfall from day one.

Compensationitis

All gone quiet?

All thinking hard?

No weaklings out there?

Come on folks, get this sorted.