Endowment Policies

dunstonh

That depends on your point of view, does it not?

There is no point of view. It is a fact.

There are plenty of valid reasons for complaint and it is somewhat ironic that the timebar which now sees most endowments barred from complaint is based on shortfall (which would indicate performance below expectation) when the the FSA doesnt allow complaints about poor performance.

Waiting until maturity to decide to complain then was one of the reasons the timebars were brought in as they didnt want people to hedge their bets.

I sold a load of them too but they were still crap because I now know they would never do what it said on the tin, or as the law would say they 'would not meet legitimate policyholder expectation' thanks to the life offices and 'promises promises' and the regulators (Mark Weinberg) and his LAUTRO assumed expenses. The cost was never a reason to sell them.

The ones sold during that period were a disgrace to the regulator. However, ones sold after that period did not have that problem. Although many still used target growth rates which were too high. Although a good number used sensible target growth rates but were stuffed by a number of events which typically happen rarely but instead happened in succession creating what was in effect a perfect storm.

it cannot be forgotten, but frequently is, that an interest only mortgage with endowment was cheaper than a repayment mortgage plus life assurance and that was often the major reason that people took them out.

dunstonh

From FOS publication 11/12:

11/12
In May 1988, Mr P invested in a with-profits savings plan. He was disappointed with the return he received and noticed from his statements that the annual bonuses declared by the company were decreasing, compared to previous years. He concluded that the company must therefore have mis-managed his investment.

We were unable to investigate his complaint about the level of bonuses declared by the company, since this was a straightforward complaint about performance and therefore outside our jurisdiction. However, we considered the suitability of the investment and established that it met Mr P’s stated requirements at the time of sale, and that the adviser had fully documented these requirements and the reasons for recommending the plan. There was no evidence that Mr P had been given any guarantees about the plan’s performance. We did not uphold the complaint.

Or in issue 49 where it says the following:

In certain circumstances we can dismiss a complaint without considering its merits. This is sometimes called early termination or dismissal. The Dispute Resolution Rules (DISP) set down by the Financial Services Authority (FSA) in its Handbook of rules and guidance give a total of 17 sets of circumstances where we may dismiss a complaint without considering its merits. The Handbook is available on the FSA’s website at https://www.FSA.gov.uk.

<snip other reasons>
the complaint is about investment performance

Investment complaints generally concern a customer being mis-sold a financial product or being given advice that was unsuitable for their needs. Firms sometimes try to claim that such complaints are really only about investment performance. However, as customers often only realise that something is wrong when they see the product performing badly – it should not be automatically assumed that the complaint is solely about performance. Where a complaint is solely about investment performance, we can dismiss it.