Mis-sold endowment?

sjrobs

5 years ago, we were sold an endowment by an independent financial advisor. This was at a time when all of the negative media coverage surrounding endowments was just beginning.

We were quite naive about financial matters but the advisor convinced us that an endowment was the right way to go for the following reasons:

• all bad press / media coverage is about short term endowments that run over 10 year

• all 25 year policies perform above and beyond the mortgage value

• assuming 6% growth would guarantee us paying off our mortgage (as other companies assumed 8-10% growth), this was a completely safe option
  

We have just found out that our policy is currently 15k short of the anticipated 48k, and this is based on the assumption of 5.5% growth for the remaining 20 years!

We have written to Friends Provident who the endowment is with, but they have informed us that we need to speak to the financial advisor who sold the product. Unfortunately, he retired on ill-health some 4 months after selling the product.

what do we do next?

Have we been mis-sold the endowment?

Are we entitled to compensation / refund of premiums?

Please help!

Webbozen

I can sympathise with you but that is all I can do as I am not an advisor.

I have a similar thing going on with another Insurance provider who sold me a policy 6 years ago.

1. The Independant advisor we used is no longer at company.
2. The branch of company advising was closed down later as cost cutting exercise
3. All business transferred to another office of same company
4. Company no longer does Financial advising.
5. That company sold all advisor business to another company.
6. The policy was with Scottish Equiable who were taken over by Prudential.

What I have found out is that no matter who sold or missold your policy you can still make a case by contacting the Insurance Ombudsman who can advise line of action to take if any.

There is someone out there accountable and in the end I think it is the Insurance Policy Company who has to give you the details of who took over the business of the retired advisor. Someone is still geting commission on your payments so do not be put off. It is a struggle and they will try and wriggle and blame everyone else and pass the buck.

Be strong
Be patient
Keep your cool
Keep copies and logs of all letters and phone calls etc.

Good Luck.

dunstonh

Also be wary that you may not get anything as you were aware that it needed to grow by a certain amount a year averaged over the term.

Also, the projections would be low.

You are only 5 years into the plan and the charges are front loaded. If you assume 24 months, you would only have 3 years of real investment. During that time the stockmarket has dropped. That is a very good thing to happen, not a bad thing (at least in your case) as the units you buy now are much cheaper than 5 years ago. You are getting more for your money.

Projections at 4, 6 and 8% are just that. Its doesnt mean you are going to get that. You could get more or less. However, at 5 years, any projection produced wouldnt mean a thing.

There is someone out there accountable and in the end I think it is the Insurance Policy Company who has to give you the details of who took over the business of the retired advisor. Someone is still geting commission on your payments so do not be put off. It is a struggle and they will try and wriggle and blame everyone else and pass the buck

.

If it ends up at the FSCS, then its people like me that pay for it. Which really gets on my nerves as I have never sold an endowment as an IFA, yet I have to pay for others that did.

sjrobs

thanks for the replies webbozen and DD.

i think we will pursue the case by writing to the Insurance Ombudsman.

We'll see what they have to say.

At this moment, i think we would be happier switching to repayment, and trying to get some of the money back that we have invested into the endowment.

I know we are only 5 years into the policy but 13k is a lot of money to find, and at £100 a month, its a lot of money to be investing in what could be a dead duck.

Thanks again.

AMILLIONDOLLARS

I have just read this article in the time. It may be useful to you

http://property.timesonline.co.uk/article/0,,14029-1265346,00.html

martinhp

As an IFA I completely agree with DD. These letters that Life companies are having to send out are doing more damage than good. I think a lot of them totally misrepresent the policy.

Also endowment mortgages make it possible to remortgage whenever you like even with 2 years left to go, this can save a lot of money!! Whereas with repayment mortgages that have less than 10-15 years to go, it does not work out beneficial to change lenders anymore (in most cases)

fazz

try https://www.endowmentaction.co.uk they have details of info required and a form template to make filling out the letter to your endowment comp easier...