Endowment update: payouts still falling

dunstonh

What about the sales without documentation or signature - the only thing I signed for my WP policy was the direct debit instruction to my bank- a Fact Find that said no illustrations were given to the client? All perfectly 'legal' according to dunstonh - not a regulatory requirement to give illustrations and yet we were supposed to have known what we had purchased. Is it right that firms should be allowed to get away with this - does this work for any other contract you can think of between salesman and customer?

I did not say that no illustrations was legal. I said there is no requirement to get factfinds signed.

Its quite possible to set up many contracts today with no signature in sight. That includes investments as well as life cover.

Loads of contracts exist in many professions where no signature is required.

mayb_2

My my you all do so want to have it both ways don't you.

The signature is claimed by toonfish and Mrhelpfull to show that they have advised the customer and the customer has signed to say they understood. If they have signed and not understood it is their own look out. Complaints are not upheld if there is a document signed by the customer - aparently whether they understood it or not.

I have said that the signature is not the important part - the ensuring of the full picture being given to the client and their understanding before getting the signature is. If you have not signed any documents this should be proof enough that you were not properly sold the product at all. The obtaining of a signature should therefore, follow the steps outlined by defenderoftheweak and myself in other posts.

Now we have dunstonh telling us that a signature is not required at all - what do you do dunstonh spit on your hand and shake? So now we are back to my word is my bond or is it trust me I'm an IFA and I promise to tell the truth if I am asked by the Ombudsman - no I am not referring to you personally dunstonh.

originally posted by dunstonh
"I did not say that no illustrations was legal. I said there is no requirement to get factfinds signed."

Okay dunstonh so if I have an unsigned factfind with a statement in it that says no illustrations were given to me - do you think the Ombudsman was right to insist that, although the company had produced no evidence to support their contention that I had been given product literature illustrating my purchase, he believed I would not have bought the product without such paperwork? So should more weight have been given to the fact that the document was unsigned (not a regulatory requirement) or to the statement in it that I hadn't had any illustrations (a regulatory requirement) what do you think?

Sounds like heads we win tails you lose to me.

originally quoted by Mrhelpfull
"Does one really expect compensation culture to rear its ugly head so long after a sale. I dont think too much of the public will realise advisers like Dunston H are probably going to be paying for PI run off cover for the rest of his life in case of a claim."

It is not possible to make a claim for 20 years or more - the regulations date from 1988 I believe.

One might expect that if you missold a policy in 1989 that a legitimate claim may be made against you in 2004. Perhaps that was the real reason why so much paperwork was shredded from those sales? It is probably fairly safe to keep documents from the last 6 years as the policies in question were no longer being sold then.

Compensation culture, nanny state blah blah blah - you still haven't read any of the evidence that what you are saying is not based in fact - but don't lets allow the truth to get in the way of the argument. I don't think the FSA has done much to help those who were missold in the past (too many constraints put on them to do that) but they have certainly gone a long way to stop it happening in the future.

However, whilst you bury your head in the sand and deny the facts of the matter you are placing yourself at risk of repeating this in another way. The sub-prime market problem being experienced in America will reach us at some stage. The first time buyer market is drying up and lenders are going to greater and greater lengths to get people on board the mortgage train. This involves stretching their incomes to greater and greater lengths. When that pops that is when you may have to produce the paperwork; to show that these people knew what they were doing and signed on the dotted line in sure and certain knowledge that they would not be able to afford it if something went up in the future - like the interest rates at the end of the introduction period.

Still perhaps it will be another generation of Mortgage Advisers who will be posting on this board then, that they should not have been stupid enough to sign the paperwork and anyway it didn't really happen - certainly not in my office and anyway all of the paperwork has been shredded because of the compensation culture of the early 2000's.

dunstonh

Now we have dunstonh telling us that a signature is not required at all - what do you do dunstonh spit on your hand and shake? So now we are back to my word is my bond or is it trust me I'm an IFA and I promise to tell the truth if I am asked by the Ombudsman - no I am not referring to you personally dunstonh.

When you buy goods from a shop, do you sign anything then?

A signature helps firms things up in the event of a complaint but it doesnt make it a requirement.

Nowadays, direct debits dont need signing, applications can be submitted online without a signature required. You are putting to much emphasis on a signature.

Okay dunstonh so if I have an unsigned factfind with a statement in it that says no illustrations were given to me - do you think the Ombudsman was right to insist that, although the company had produced no evidence to support their contention that I had been given product literature illustrating my purchase, he believed I would not have bought the product without such paperwork? So should more weight have been given to the fact that the document was unsigned (not a regulatory requirement) or to the statement in it that I hadn't had any illustrations (a regulatory requirement) what do you think?

The factfind is not a contract. It is information that is used to support the advice and suitability report. Signing it makes no difference at all. Some companies do get people to sign it. Some dont. Some combine the factfind with their data protection statement. However, it wouldnt be looked at any differently by the FOS whether it is signed or not. Its the information on the factfind that matters and most of the data recorded is factual. Name, address, date of birth, NI number etc. In areas where advice is more specific then other data will be obtained. Such as getting existing policy details from providers. Copies of that goes on the file. Higher risk transactions would get more detail recorded.

The most important document is the suitability report. That contains the details of the recommendation and the reasons why. It contains the pros, the cons and details of any possible alternatives that may be equally as good or better (and why they were not used).

The suitability report is where most complaints will be upheld or rejected. It has to be issued within 10 days of the application (or commencement date under some circumstances). There is a trend to get these issued in advance of the application and a receipt signed by the client to say they have read and understood it. Again not a requirement but it's seen as a good idea to help protect the adviser.

The ideal suitability report should almost be a standalone document that someone can read and tell that the advice given was spot on without any reference to anything else. The factfind is supporting material to the suitability report. Other data that may have been obtained is further supporting material. High risk transactions should carry more documentary evidence than lower risk transactions.

originally quoted by Mrhelpfull
"Does one really expect compensation culture to rear its ugly head so long after a sale. I dont think too much of the public will realise advisers like Dunston H are probably going to be paying for PI run off cover for the rest of his life in case of a claim."

It is not possible to make a claim for 20 years or more - the regulations date from 1988 I believe.

What about the next 20-30 years. I will have a financial liability for the advice I give until the day I die. I could be 95 years old and not traded for 30 odd years but I carry the financial liability for any complaint. That goes for any self employed or partnership IFAs. Personally, I dont have a problem with that and I think all advisers should have more liability for the advice they give.

I dont see why I should be paying the redress of endowment complaints when I have never sold an endowment as an IFA when the person that did doesnt have to pay a penny.

Compensation culture, nanny state blah blah blah - you still haven't read any of the evidence that what you are saying is not based in fact - but don't lets allow the truth to get in the way of the argument. I don't think the FSA has done much to help those who were missold in the past (too many constraints put on them to do that) but they have certainly gone a long way to stop it happening in the future.

To be honest, I hate this compensation culture. Indeed, "society" in the UK in some areas is disgraceful. You just have to look at daytime TV and see the adverts. Had a accident? claim from someone. Got into debt? dont worry about it, get an IVA. There is no personal responsibility for anything and its too easy to find a way out. No pride.

Mr_helpful

I don't think the FSA has done much to help those who were missold in the past (too many constraints put on them to do that) but they have certainly gone a long way to stop it happening in the future.
Complete and utter tripe there are all sorts of inapropriate products being missold today
You just have to look at daytime TV and see the adverts. Had a accident? claim from someone. Got into debt? dont worry about it, get an IVA. There is no personal responsibility for anything and its too easy to find a way out. No pride.
You forgot the "have you got an endowment ? we can claim for you"

mayb_2

Believe me dunstonh I have more than enough pride for both of us!

I am not at odds with everything you say. You at least accept that missales did take place. Most of this however appears to refer to the here and now - not the past in which most of these missales are embeded. "The most important document is the suitability report" I don't know if the documents referred to in your post existed in the early 90's but I certainly didn't see them. The fact that this lack of paperwork work, signed and unsigned, was allowed to work in favour of the company that missold my policy is one of the things that really sticks in my craw. I know that my case was valid, I know that I did not at any point lie, I know that the salesman was fully aware of what he was doing. I do not believe I am the only person who has experienced this type of sale and neither do you. Yet this case was not upheld by the Ombudsman and neither were many other valid cases.

I will continue to argue for the complainant myself and others. The fact remains paperwork or no paperwork signature or no signature these policies were missold and the evidence is there to see if anyone choses to pursue it.

As I have said before, I believe if you are going to be an IFA the cost of your insurance is just part of your running costs and will be absorbed into the charges you make to your clients. I have to insure my car - I have never claimed - I am aware that my insurance is higher than it might be because of the number of uninsured cars on the road. I have no way of offseting this cost and I just pay it because I have to. I have no sympathy for this argument.

And before anyone starts banging on about the past not being relevant and we should all skip merrily into the future. I and others in the same situation have rather had our futures messed up by this past. I for one dunstonh do not have time to watch day time television - nor to post all day on this site I might add. Too busy earning the money to pay off my mortgage and save for my pension - not to mention university fees etc.

ps dunstonh if I buy something in a shop I have a receipt and a guarantee. I am protected by the sale of goods act (for six years on purchases). I have Trading Standards and Consumer Associations and many others willing to support - freely - my rights as a consumer and to advise me and if necessary act on my behalf. This is also true of electricity bills, water bills, gas bills and telephone bills. I can have their free help and advice on any purchase apart from a financial one.

You only have to look at the main site to see what it is that the financial services industry have been up to lately and there is not sign of the FSA or the Ombudsman proactively seeking to advise and help consumers to get their rights in these circumstances. No -more of a follow on act really, quickly fading behind the curtain at the first opportunity. Dispatches - The banks sales techniques and frauds carried out by their employees? I could go on but lets face it a lot of you have got your fingers in your ears and are looking up at the sky whilst you la la away to yourselves.

mayb_2

"Complete and utter tripe there are all sorts of inapropriate products being missold today"

So Mrhelpfull these were not missold in the past - that is just the compensation culture talking there - but they are being missold now. Perhaps you could expand on that one - what for instance and who by I wonder. Is it the bullet in your foot that is making that puddle?

dunstonh

"The most important document is the suitability report" I don't know if the documents referred to in your post existed in the early 90's but I certainly didn't see them.

It was called a reason why letter back then. It existed but the importance wasnt seen to be as high as it is today. That is reflected in some of the content and presentation.

mayb, your case sounds like a valid complaint. I accept there were valid complaints and probably quite a lot of them. However, not to the degree that has resulted in people being paid out.

As I have said before, I believe if you are going to be an IFA the cost of your insurance is just part of your running costs and will be absorbed into the charges you make to your clients. I have to insure my car - I have never claimed - I am aware that my insurance is higher than it might be because of the number of uninsured cars on the road. I have no way of offseting this cost and I just pay it because I have to. I have no sympathy for this argument.

yes, i pay that and accept that. However, on top of that I pay a second time for those that dont have that. Car insurance you pay once. Plus car insurance doesnt cost tens of thousands of pounds.

You have to admit that its not right that some advisers have no personal liability and some do, yet those that do have a personal liability pay more than those that do not.

ps dunstonh if I buy something in a shop I have a receipt and a guarantee. I am protected by the sale of goods act (for six years on purchases). I have Trading Standards and Consumer Associations and many others willing to support - freely - my rights as a consumer and to advise me and if necessary act on my behalf. This is also true of electricity bills, water bills, gas bills and telephone bills. I can have their free help and advice on any purchase apart from a financial one.

And financial services, you have an illustration, a key features document, a suitability report, cancellation rights (with another illustration sent with it), copies of the application submitted (where no signature was used).

Then you have the complaints proceedure and the FOS.

You only have to look at the main site to see what it is that the financial services industry have been up to lately and there is not sign of the FSA or the Ombudsman proactively seeking to advise and help consumers to get their rights in these circumstances.

There is no help to advisers either. The FSA rarely issues any guidence. It issues guidelines which often allow varying interpretations and then if it decides a company gets it wrong, it fines them. If that company went to the FSA at the start and said can you explain it more, the FSA wouldnt help.

The FSA has done nothing good for financial services apart from the introduction of KFIs for mortgages.

Why does the FSA focus on commission (which would be classed as illegal in other professions) when the consumer doesnt pay commission? They pay charges. The focus should be on charges. The FSA has pushed so much disclosure now that consumers are bombarded with documents which they are never going to read because there are too many. The KEY facts get lost in the reams of paper.

Dispatches - The banks sales techniques and frauds carried out by their employees? I could go on but lets face it a lot of you have got your fingers in your ears and are looking up at the sky whilst you la la away to yourselves.

These are such a tiny minority compared the volume of transactions though. How many other people in a profession break the rules every day? I am not saying it is right to break the rules but it is often made out on this site that it only happens in financial services.

Mr_helpful

mayb wrote: »

"Complete and utter tripe there are all sorts of inapropriate products being missold today"

So Mrhelpfull these were not missold in the past - that is just the compensation culture talking there - but they are being missold now. Perhaps you could expand on that one - what for instance and who by I wonder. Is it the bullet in your foot that is making that puddle?

Look around you there are plenty of useless products miss sold everyday not just in Financial services but yes FS has its share and the FSA does nothing until its too late because it only regulates the sale not the product. Yes put in english you can be sold the biggest load of rubbish but as long as the sale took place ethically and by the FSA rules you cant do anything.
In about 1999 at a seminar for single premium payment protection I was almost thrown out for standing up and saying it was crap and an utter rip off. How long did it take the FSA to spot what was wrong with it? I have never sold one in my life and never will. So in addition to single premium PPI lets see what else is out there to trip people up. 1) Adverse credit mortgages, 2) secured loans, 3) pensions, 4) life assurance and critical illness, 5)ASU policies. 6) low interest high fee mortgages etc. All of these can be miss sold if one wants to. All have potential claims. But of course it doesnt stop there. The financial services is not the only market for duff products but it is one where selective memory can induce a false claim.
Selective memory can also be induced by a clever salesman who can say or write one thing and you are led to believe something else. Amnesia can be induced in conversation, Its possible to put someone in a trance by conversation alone and just the same as you dont remember too many dreams you dont remember too much of the sale. A 2 hour interview I now realise would make this very easy to do. Possibly its a good thing Derren Brown doesnt work in financial services
When dealing with something small it doesnt matter but when you are talking about a clients house or his life savings it is amazing how people dont even read the first page of any literature and then wonder how they got ripped off.
Mayb You are saying you didnt sign anything not even a proposal form? because where you sign on these usually has a whole load of writing and warnings that must make people aware of what they sign or at least they are signing something serious.

mayb_2

So Mrhelpfull how can you contend that the missales of the past - where far less legislation was in place to prevent the above misselling examples- never happened and it is the compensation culture that is causing it to look as if it did? You really, really can't have it both ways.

As I said before there is all sorts of protection out there for any other type of sale but when it comes to financial ones you are on your own.

ps dunstonh if I buy something in a shop I have a receipt and a guarantee. I am protected by the sale of goods act (for six years on purchases). I have Trading Standards and Consumer Associations and many others willing to support - freely - my rights as a consumer and to advise me and if necessary act on my behalf. This is also true of electricity bills, water bills, gas bills and telephone bills. I can have their free help and advice on any purchase apart from a financial one.

posted by dunstonh

And financial services, you have an illustration, a key features document, a suitability report, cancellation rights (with another illustration sent with it), copies of the application submitted (where no signature was used)
Then you have the complaints proceedure and the FOS

All of the above for the protection of the Financial Services Industry in reality. It is not a true comparison with the protection given for all other purchases is it? It is not proactive either - just reactive.

The really galling thing is that consumers are paying their taxes and the government is paying for the FSA and the Ombudsman. The main remit of the FSA is to protect the financial services industry from loss of consumer confidence. So we are paying for the protection of the Financial Services Industry instead of the protection of the consumer from the Financial Services Industry!

dunstonh

All of the above for the protection of the Financial Services Industry in reality. It is not a true comparison with the protection given for all other purchases is it? It is not proactive either - just reactive.

Every industry is concerned with liability and claims. Welcome to the UK 2007. However, if the information is given to the consumer and the consumer chooses to ignore it then a lot of the liability has to be with the consumer.

It is actually hard to do an absolute mis-sale. It's in grey areas where there are multiple solutions where mis-sales are more likely to occur. In some areas there is no way to tell which option is best. Only time will tell. If you get it right, no complaint. If you get it wrong, expect a complaint. So, you have to issue risk warnings on paper to cover yourself if you get the 50/50 odds wrong.

The really galling thing is that consumers are paying their taxes and the government is paying for the FSA and the Ombudsman.

The FSA, FOS and FSCS is paid for by the financial services companies. Fines and fees cover the costs. I will be writing a cheque out for £6500 this year as part of my payment.

The main remit of the FSA is to protect the financial services industry from loss of consumer confidence.

Something it is quite useless at.