Low BlackHorse PPI Investment Returns

keithrj

I am trying to find out if anyone else, like me, has had trouble in understanding why such a low investment return was achieved by Black Horse Financial Services (BHFS).

Instead of going for a plain PPI policy (only 'morbidity' insurance cover) I accepted a BHFS investment funded PPI policy where my monthly payments were invested/converted into units of investment funds. The latter were used/sold to pay the monthly morbidity insurance premiums arranged by BHFS. The idea with this policy was that at the end of it there would be a lump sum payable to me, the size of which would depend on BHFS self professed expert financial investment management skills.

The policy term was around 25 years and ended in December 2011. During this period I made payments every month.

BHFS, now Scottish Widows, have told me how much the monthly insurance cost was and also confirmed the total amount of my monthly premium payments. Using Scottish Widows figures the insurance cost was less than half of what I paid during the policy period, the excess of my total premiums being approximately 4 times the maturity value offered by Scottish Widows at the end of the policy (i.e. a negative investment return of - 75%). I have asked Scottish Widows to account for this by explaining how my monthly premiums were applied in practice. It has declined to provide this information considering my request to be unreasonable.

Whilst I am in the process of addressing this matter with the FOS, I am wondering if anyone else has had similar experiences?

Thanks.

Insider101

This isn't a PPI policy as investment linked PPI policies don't exist. It sounds like a unit linked endowment which is part life cover part investment and taken out with the aim of repaying your mortgage.

The poor investment returns are because the underlying investment funds didn't perform well. Simple as that. Market fluctuations.

If this is what you have compained about then unfortunately it probably won't get very far with FOS. Black Horse are entitled to object to FOS consideration as its a complaint about investment performance.

Having said that, presenting it to FOS as a PPI complaint certainly won't get anywhere.

If you were misled about the investment (I.e led to believe it was certain to pay off the mortgage, not made aware of the risks) then you have a possible case for Mis- selling which FOS CAN consider

dunstonh

Low BlackHorse PPI Investment Returns

PPI is a general insurance product. It has no investment element.

Black Horse FS never sold PPI. They were the advisory arm for Black Horse Life (later LTSB LIfe and now Scottish Widows Heritage products)

I have asked Scottish Widows to account for this by explaining how my monthly premiums were applied in practice. It has declined to provide this information considering my request to be unreasonable.

They dont need to tell you as it is commercially sensitive. They do however, publish the investment return data.

Whilst I am in the process of addressing this matter with the FOS, I am wondering if anyone else has had similar experiences?

You are a bit late to the party. Most endowments are now timebarred from complaint. Most being barred by 2007-2009.

The issue was one of just poor investment returns in that period. However, it is highly unlikely you got -75%. Most still managed to beat cash savings. They just didnt get what the target figures were.

The FSA do not allow complaints about investment returns. So, that part of your complaint will be rejected by the FOS. They may look at suitability over the sale if you were not timebarred.