Endowment Mis-selling - Don't give up!

shrek101

It was Standard life who I am with. I took our endowment out in the late 80's but after warnings from them about a shortfall we complained as we were told when when took the policy that we would have a surplus.

Make sure if you change to a repayment to also get some cover in case one of you is unfortunately not around. Standard life does one which decreases each year due to payments made.

Sofa_Sogood

shrek101 wrote:

It was Standard life who I am with. I took our endowment out in the late 80's but after warnings from them about a shortfall we complained as we were told when when took the policy that we would have a surplus.

Make sure if you change to a repayment to also get some cover in case one of you is unfortunately not around. Standard life does one which decreases each year due to payments made.

I think that's probably what I was trying to say shrek - we were led to believe there'd be a surplus of some kind. But I'll have to get my facts right before I post more about Standard Life.

We're on a part repayment with Abbey at the moment, the other part relying on the endowment with Standard Life and one with Scottish Widows. We were also planning to go down the offset mortgage route too, but I think until we know what's what, that'll stay on the back burner.

And if as usual I can't get my head around all the figures , I'll enrol the help of my nephew who's a conveyancing solicitor. Whilst he might not know all about endowments and such, he'll understand the jargon far better than we will - and what cover we'll need. I'm not unduly worried though, it's just those niggling doubts re S.L. that I mentioned.

Cheers shrek.

dunstonh

We both seem to think that on at least one of our endowments, Standard Life, there's a shortfall expected. Standard Life were contacted but when asked how it was faring, we were told it should mature for £18,750 and no more. This is the exact amount that the first mortgage cost, so I presume that whilst there's no shortfall, there's no bonuses either.

To be told that is incorrect. Standard Life project at 3 growth rates 4,5 & 6%. There is no endowment promise anymore.

However, before you go thinking its all bad at Standard Life, it isnt. On many endowments, Standard Life project from the surrender value and do not include any accrued final bonuses to date. This gives it an artificially lower projected value than is likely. I have seen Standard Life endowments show a shortfall a year or two before maturity but then come in well above target. An IFA should be able to verify this for you (I have a few on the go from this board currently). Or if you can do a quick and dirty check by looking at the guaranteed minimum sum assured and annual bonuses. That is the actual minimum maturity value. If the value of those two in total is below the projections, then you know the projections are under stating the likely value.

On top of that, if its a small shortfall, you should consider sticking with it as Standard Life are looking to demutualise in 2007 and there will be a benefit of some kind (either shares or payout in to the plan is likely). On average, it is estimated to be £1100 per policy.

Sofa_Sogood

dunstonh wrote:

To be told that is incorrect. Standard Life project at 3 growth rates 4,5 & 6%. There is no endowment promise anymore.

However, before you go thinking its all bad at Standard Life, it isnt. On many endowments, Standard Life project from the surrender value and do not include any accrued final bonuses to date. This gives it an artificially lower projected value than is likely. I have seen Standard Life endowments show a shortfall a year or two before maturity but then come in well above target. An IFA should be able to verify this for you (I have a few on the go from this board currently). Or if you can do a quick and dirty check by looking at the guaranteed minimum sum assured and annual bonuses. That is the actual minimum maturity value. If the value of those two in total is below the projections, then you know the projections are under stating the likely value.

On top of that, if its a small shortfall, you should consider sticking with it as Standard Life are looking to demutualise in 2007 and there will be a benefit of some kind (either shares or payout in to the plan is likely). On average, it is estimated to be £1100 per policy.

Thanks for replying dunstonh.

What we've been told is obviously incorrect then, but that's what we were told. But don't get me wrong, we're not totally unhappy with Standard Life, it's more of a feeling that things *aren't* as rosy as we expected.

Incidentally, we're only two years off maturity with that endowment, so not sure how we stand with regard to the demutualisation, but it does tie in with what you said: " I have seen Standard Life endowments show a shortfall a year or two before maturity" Hopefully, the end of what you stated: "but then come in well above target." applies to us. But we'll stick with them regardless.

I'll leave the figures for now if that's ok, I'll only get into a tizz, but there's a meeting planned with our accountant soon, (this week in fact), and he should, hopefully, be able to shed more light on it too and find us the best deal for our next move.

Thanks again for the clarification.

dunstonh

I'll leave the figures for now if that's ok, I'll only get into a tizz, but there's a meeting planned with our accountant soon, (this week in fact), and he should, hopefully, be able to shed more light on it too and find us the best deal for our next move.

The accountant will probably say that he cannot help. Its a regulated financial product so he can only discuss it generically. To know the information for sure, a policy details request needs to be made to Standard Life. This supplies information that is not shown on projections or values. Any IFA can obtain this information for you or you can make the request yourself. I doubt an accountant would know what to look for as it is outside their scope of expertise.

Sofa_Sogood

dunstonh wrote:

The accountant will probably say that he cannot help. Its a regulated financial product so he can only discuss it generically. To know the information for sure, a policy details request needs to be made to Standard Life. This supplies information that is not shown on projections or values. Any IFA can obtain this information for you or you can make the request yourself. I doubt an accountant would know what to look for as it is outside their scope of expertise.

Well if nothing else I've learnt a little more about endowments, and you've reminded me that the IFA I had has retired, or left Allied Dunbar, or emigrated, but he's gone, so that's another thing to put back on the agenda - find another one and not ask the accountant or nephew for that particular sort of advice.

BUT, as I've been putting files that I have at home in order, I noticed a letter from Standard Life dated October 2000 giving us some sort of promise that our endowment plan will meet its targeted value at maturity, provided the future earnings on the assets in which our policy's invested are on average at least 6% each year (after tax). And, in their words again: "The promise is subject to future growth in Standard Life's capital being enough to allow us to set aside regular provisions to meet any possible shortfalls."

It goes on to state that they don't think we need to take any action at that present time (2000).

I wonder why both my husband and me thought there'd be a shortfall? We honestly didn't dream that one up, and it followed on from a phone call he made to SL not that long ago. Have things changed much since 2000?

As you'll realise, I've used their terminology, and I haven't seen any updates yet, so presumably it seemed ok in October 2000. But I'll keep on looking whilst I'm going through this paperwork. And searching for an IFA

Thanks again.

dunstonh

Standard Life removed that promise late last year. A promise is not a contractual guarantee. Its a marketing gimmick. Unless the word guarantee appears, it isnt.

Sofa_Sogood

I'm going back to the drawing board, or the paperwork.

It's like ever-decreasing circles isn't it? But at least I'm sorting through the paperwork at long last.

Thanks dunstonh.

bill_3-2

CONFUSED

I have been through the posts and I am not sure if WE have to prove the mis-selling or do THEY have to prove that it wasn't mis-sold.
Ta,

UpdateL
I have complained to the BS who sold the endowment (Royal & Sun Alliance) and they have asked me to fill in a questionaire,including my earnings and out goings when I took the mortgage out, Why do they want this?
I have also asked the BS and the Insurance company for a copy of my file and any docs they have. They don't seem to want to give me this.
bill

scottishlizzie

You do not need to prove that it was mis-sold. You need to raise your concerns as to why you think it was mis-sold and they then have to look for evidence to prove that you were made aware of the risks associated with the plan(the most common mis-selling allegation).

Re the forms - they want to know things like your outgoings because your disposable income is relevant to whether the mortgae and plan were affordable at the time. If you feel that it was not affordable then you should try to give these details. If not and your main concern is that you were not adivised of the potential of a shortfall, then your outgoings at the time will have little bearing on the outcome of the complaint so just say you can't remember.

(I work in the complaints department of a large insurer and also do freelance complaint handling on behalf of clients who don't want to pursue a complaint themselves.)

My advice - don't hesitate, complain. More firms are introducing time exclusions on complaints.