im lost re miselling??

gobananas5

The pre 88 policy may well be rejected on the grounds of 'advice was not the same then' or you must have asked for this policy. On a positive, as someone has posted all of the possible parties have agreed to be ruled by the Ombudsman so if you get turned down you can send your complaint to them

EdInvestor

I am a retired IFA of 20 years standing who feels ripped off by the providers and the regulators, I am most aggrieved that my clients were let down because I didn't know then what I know now.

I'm not retired and feel ripped off by the IFAs that sold all these plans with little common sense and extremly poor product knowledge and then !!!!!! off leaving the bill to sort out this mess to those of us who have never had a complaint or sold such duff products.

Guess what, guys? Most punters out there with endowmemnt problems don't give a tinker's t*ss who caused the problem - the IFAs, the regulators, the insurance companies, the building societies, the tied agents,the banks,the whole shower.

All they want is some decent clear advice on what to do to fix it up

Yet what do they see? Teams of characters who caused the problem in the first place charging very high fees to resolve it: other salesman using their need for help as an opportunity to sell them yet more underperforming products with high charges:companies dishonestly turning down complaints for spurious reasons: industry people arguing and playing the blame game in public.

Do you think this reflects any credit on life and pensions products? Do you think this approach will encourage savings and investment?

Or will it just further tarnish the image of the whole financial services industry,which is already deeply in the mire?

Can you perhaps think of a better way?

Compensationitis

Every single policy that was sold between April 1988 and January 1995 was faulty, every manufacturer used 'Inappropriate charges' as per the FOS decision trees so the risk was misrepresented as per the same decison trees. This applies to ALL policies that were subject to LAUTRO rules but the regulator refuses to do anything about it simply because it is culpable. If all endowments, pensions, FSAVCs, bonds, WOL etc form that crazy era were rescinded we would see some life offices go under would we not?

The longer this farcical situation is allowed to continue the worse it gets for the policyholders.

EdInvestor

Compensationitis:

Tell me, if the regulators' projections were wrong and the policies thus would never be able to perform, why did the insurance companies continue to provide them? Why did the salesman continue to sell them?

Why did nobody whatsoever take any responsibility for stopping the farce?

And BTW did you know that the boss of Lautro at the time was the former CEO of Equitable Life? Makes you wonder, doesn't it?

BarryM_3

Hi Compensationitis,

I've seen your numerous references to 'inappropriate charges', and assume that since you have expert knowledge, you have a valid point. But it would certainly help me if you could be more explicit - I've looked through your previous posts, but can't see anything that says exactly what this is about. I write as someone with a 1990 endowment. I've kept all the paperwork produced at the time of the sale, which includes several illustrations. I'm just trying to understand how these were arrived at. Somewhere in there, presumably, there are numbers that I can point to and say "look - inappropriate charges!". But what am I looking for?

Best wishes,

BarryM

Compensationitis

Let's start from scratch, the regulator specified the charges and the growth rates to be used in illustrations, even though the evidence was piling up it took SEVEN YEARS for them to stop the madness.

I found out that the providers used 'inappropriate charges' when I sent an email to FSA Chief Counsel in July 2004. I than made an official complaint to the PRU who said 'we cannot be held liable for industry wide initiatives' and I complained to the FSA who fobbed me off (they think) with a reall darting about the bushes. Standard Life are ignoring me regarding my own policy!! I speak with IFAs who still don't understand, some providers argue that because they all used LAUTRO charges all premiums would have been the same for a specific target amount, I was under the impression they used their own charges to set the premiums because electronic comparison services showed a variation in premiums, a friend of mine obtained chapter and verse from the providers in 2001. NOT ONE OF THEM (sorry I shouted) used own charges and they knew what they were doing but they hid behind the regulatory somescreen.

EdInvestor

Hi BarryM,

What happened as far as I can see is that the then regulator (preceding the FSA) which was called Lautro, produced a series of growth projections for With-profit products that it required all insurers and salesman to use. It's the same idea that we have now, where the insurer tells you what your endowment will be worth if it grows at 4%,6%,8%. This is a generic projection set by the FSA that everyone has to use, it has no specific relation to your particular policy.

Compensationitis says - and he's right - that for a long time these mandatory projections were way too high - that they didn't take account of the costs and expenses incurred by the companies in providing and marketing the policies.So high were these charges, that even at the highest projected return, no endowment could meet the target.

There were quite strong complaints made about this at the time, particularly by the respected Money Management magazine, the most authoriative source of news on the industry.

It took years for the regulator to drop the incorrect projections,but meanwhile the companies and the IFAs merrily kept on selling the products, without warning their customers.:wall:

Unfortunately however I doubt that there is any point in making a misselling complaint based on this matter. The Ombudsman will not be able to act on it, as his remit is quite specific, so it will just get back-burnered.Many Equitable victims have tried to claim compensation on the basis of misrepresentation, regulatory failure and such.Some have won in court. You could try that route, particularly if you could use the cheap Small Claims court. But experience suggests it won't work with the Ombo nd would be a waste of energy to try.

Compensationitis

I'm writing a piece for Money Management on this subject and you are half right in what you say editor.

You should do a search on the FOS website for 'inappropriate charges' and 'misrepresentation' in their decison trees.

We are putting a case together using after the event insurance to force them to admit they did these things, on behalf of IFAs of course but also for the benefits of all policyholders who know nothing of their very real problems ahead created by the madness of the past and the current stupidity of the FSA rules on reprojections.

EdInvestor

I had a look at the FOS site and found this interesting page - scroll down for many examples showing how the Ombudsman calculates whether you have made a loss and how much redress money you should get.

Note that it has nothing to do with the shortfall and the amounts are quite small, usually 1-2k.

EdInvestor

BarryM wrote:

I've kept all the paperwork produced at the time of the sale, which includes several illustrations. I'm just trying to understand how these were arrived at.

This might be worth a look.

http://www.financial-ombudsman.org.uk/publications/ombudsman-news/11/nov-mort-end-com.htm