Independent Financial adviser mis sold life insurance - help with a complaint!

chunky_21

Hi Guys, first post so please be gentle...
I have been mis sold mortgage life insurance and im trying to gather as much info to have a good case.
I was advised to take out a mortgage life insurance/critical illness policy in 2008, with a decreasing cover. My mortgage is interest only.
Im really not sure why he sold me this as it was clear from the start a repayment was not financially possible.He also advised me to take out income protection, and this will stop at the age of 50.... why.. i am not sure as i will no way be retiring at 50.

Ive been told my IFA should have taken a fact find and made a suitability report - which i have never seen.Also the compliance department at this company should have made regular visits to this guys paperwork to check he was competent.

This IFA company has gone into liquidation, do i have any chance of getting any compensation? if not will the ombudsman be able to enforce anything?will i be able to get hold of a suitability report sill?

any advise is appreciated!
:mad:

dunstonh

I was advised to take out a mortgage life insurance/critical illness policy in 2008, with a decreasing cover. My mortgage is interest only.

Was this due to budget?

Im really not sure why he sold me this as it was clear from the start a repayment was not financially possible.He also advised me to take out income protection, and this will stop at the age of 50.... why.. i am not sure as i will no way be retiring at 50.

Again, was this due to budget?

If someone cannot afford the premium for full cover then the next thing that happens is that you start to compromise on the cover.

Ive been told my IFA should have taken a fact find and made a suitability report - which i have never seen

Life cover (and associated insurances) do not require a suitability report.

Also the compliance department at this company should have made regular visits to this guys paperwork to check he was competent.

1 - nothing to do with you. That is between him and the company he employs to offer compliance services.
2 - how do you know they didnt
3 - what is your definition of regular? 12-18 months is typical.

This IFA company has gone into liquidation, do i have any chance of getting any compensation?

On what basis are you worse off because of the recommendation?

If the cover was set up to cover the need in full, are you saying you could afford it? (it wont be pence difference, possibly as much as double the current premium to get to 65)

if not will the ombudsman be able to enforce anything?

If the principle no longer exists then you cannot access the FOS. You have to go to the FSCS. Depending on the commercial arrangement with the compliance company, they may or may not have the liability.

The bottom line is that there is potential for a complaint here but most, if not all of it, could very easily be signed off as justifiable on the basis of affordability. It is rare for someone to cover all their needs as it costs too much. So, something has to give. Reduced sum assureds are on thing. Reduced period of cover on income protection is very common. Based on extremely low levels of information, this really looks like it comes down to budget.

Wutang_2

chunky_21 wrote: »

Hi Guys, first post so please be gentle............................................................................................................
any advise is appreciated!
:mad:

What are you so MAD about?

kingstreet

Did the individual advise you on the mortgage and the protection for it? You use the term IFA, are you sure the person was truly an independent financial adviser, or was he working to a panel of insurers or perhaps even tied to one?

What paperwork do you have from the time? Initial Disclosure Document? Key Facts Illustrations? Suitability or "Reasons Why" Letters?

Can you let us have the name of the firm? It would help to guide you in the right direction as the firm is no longer in existence.

Conrad

dunstonh wrote: »

If the principle no longer exists then you cannot access the FOS.

Is it not the case this IFA may have been part of a network such as Sesame, and as such they would be responsible for miselling and whatnot regardless of whether the IFA is no longer trading?

OP - I've come accross this same complaint a few times. There are 2 possibilities usually. 1) The client could not afford level term assurance and so took decreasing cover so they at least had some cover.

2) Brokers deliberately and knowingly arranged decreasing cover in order to win the business as clients all too often do not read / understand whats been arranged, in the similar way they don't read everything on the box of pills thier TRUSTED GP recommends.

So step one establish whether he was part of a network that took responsibility for his compliance and sales. If he was, then you complain to the network. They will almost certainly not find in your favour, so then you go to the FSA / FOS (I always recommend the FSA to as this frightens firms that the FSA are aware this firm could be dirty).

dunstonh

Is it not the case this IFA may have been part of a network such as Sesame, and as such they would be responsible for miselling and whatnot regardless of whether the IFA is no longer trading?

It is. I did mention that in the tail end of my post.

kingstreet

One of the reasons I asked if the OP had an IDD, or a KFI, is the name of the network, if any, would be shown there.

chunky_21

I was never advised you could get both types of cover, i wouldnt have put my partner in this situation i i knew you could get level cover,also why would i want the income protection to stop at 50,this is when most of the population start getting health problems, its just bad advise!


If Life cover (and associated insurances) do not require a suitability report,Then why does my current FA say you do and i have one from her?

So if he is a IFA,does he have to employ a compliance department?or is that just to cover there backs if something does go wrong?is it not essential?
Never had any contact 3and a half years later, but that could be because he isnt practicing.

dunstonh

why would i want the income protection to stop at 50,this is when most of the population start getting health problems, its just bad advise!

It is not bad advice. Most people cannot afford to protect themselves to the maximum. So, you have to compromise and reducing the age is one way of going that. Also, many people only take the income protection for the term of the mortgage. That can be much earlier that planned retirement age.

If Life cover (and associated insurances) do not require a suitability report,Then why does my current FA say you do and i have one from her?

Suitability Reports are issued for products that fall under the FSA's designated investment regime. For regulated insurance products which contain no investment element, they fall under the FSAs ICOBs rulebook.

The ICOB regulations of 2005 (so only applies to post 2005 cases) saw the requirement introduced for a statement of demands and needs to be issued. Some people may refer to the statement of demands and needs as a suitability report. So, its possible that is where your current FA is mixing things up.

So if he is a IFA,does he have to employ a compliance department?or is that just to cover there backs if something does go wrong?is it not essential?

There is no requirement to employ a compliance company or have an external department. A directly authorised firm can keep it all in house.

The bottom line is that there is a potential for incorrect advice here. However, there it can also be easily explained away with justifiable reasons. We cant tell either way from what you have posted. If the adviser had told you that full coverage would have cost around double your premium, would you have done it?

Sting_Ray

Hi

Looking for advice. Just read an article saying that many NHS workers have been mis sold PPI and life cover on their mortgages as they have very good cover from the NHS. (inc full sickness cover and 2.5 salary life insurance which was easily enough for our mortgage at the time).

Back in 1999, young and naive, my wife and I were told we needed full cover and PPI before we could take out our first mortgage with Birmingham Midshires. They sorted out an Axa Sun life policy for me as my wife was not working at the time.

Please advise if I have a case and who should I take this complaint to.

Look forward to responses.

dunstonh

Back in 1999, young and naive, my wife and I were told we needed full cover and PPI before we could take out our first mortgage with Birmingham Midshires. They sorted out an Axa Sun life policy for me as my wife was not working at the time.

Please advise if I have a case and who should I take this complaint to.

Your post doesnt have anything to do with this thread subject. However, I will give it an answer....

What exactly is your complaint as it is not clear from your post. You say you had an AXA sun Life policy but you dont say what the policy covered you for. Was it life assurance, critical illness cover, permanent health insurance or ASU?

You probably did need cover as it is rare to find someone that has sufficient cover. The NHS benefits are good but it is unlikely sickness benefits, life assurance or critical illness benefits would be anywhere near enough (especially given the NHS doesnt cover some of those things or only for a limited period).

Who gave you the advice? If it was a broker then it is pre-regulation. So, they dont have to consider your complaint. If it was the lender then you can complain to them. However, before you make any complaint you need to make it clear what you are complaining about.