Is it too late to have an endowment investigated?

scrumpymummy

I have a low cost, low start endowment which was taken out in 1991. For reasons I won't bore you with I was dissuaded from looking into whether is was sold appropriately, but I have never been comfortable with it.
Is it too late to have it investigated, and if not how do I go about it?
Many thanks

TrickyDicky101

Presumably you have been getting red warning letters from the provider showing that it is projected to miss the original targets (otherwise why would you want it investigated)?

Poor performance is not a reason in itself for compo to be given, please note.

Who was the endowment sold by and who is it provided by?

opinions4u

Probably time-barred.

Who is the company?

What type of policy is it?

What are your concerns?

scrumpymummy

My concern really is that I was never very comfortable about it. I wouldn't've considered looking into it apart from the fact that questions have been raised about endowments in general.
It was sold to me by a financial advisor at an estate agents on behalf of Equity & Law. I had pressure from him and my fiance at the time (although the policy is only in my name), but I trusted them as I felt I ought to. I'm expecting that, at the end of the day, it's all my own problem.
Yes it is under performing, as I expect all policies are, but I am simply asking in order that I have explored all possibilities. It's been on my mind for the last 20+ years because, as I say, I've never felt comfortable, but I haven't been able to start pulling things apart until my husband recently left.
I just want to make sure I haven't missed anything.

holly_hobby

You can't be compensated for loss of expectation (ie poor performance).

So we then look at suitability.

Can you explain what "you were never really comfortable with it" means ?

As this suggest to me from outset (20 yrs ago) you were aware of the risks and accepted them (wholly or with reservation is irrelevant - you knew there was a risk and proceeded).

Notwithstanding this, seeing the policy is 20 yrs old, you've also propbably recd several Red Letters (ie advising of a probably shortfall to target) from at least 2000.

Accordingly, and depending upon what you knew at point of sale, this is either a straight defend and/or certainly well time barred (by several yrs).

Sorry if this wasn't what you wanted to hear - but hope it helps.

Holly x

scrumpymummy

I wasn't comfortable insofar as I am not a risk taker and prefer a 'belt and braces' approach, rather than fingers crossed and hope for the best. I know interest rates were much higher but ever the pessimist I wasn't sure.
However, not that it's particularly any use, my fiance (8 years older) and the FA were persuasive, and at only 20 I wasn't as good at digging my heels in and I knew far less about financial markets. So yes, the warning letters came, my husband (same person) insisted that I shouldn't worry, he's now left (no problem for him as it's in my name) so I'm trying to unpick everything.
It was suggested to me that I should look into whether it was sold appropriately, which is why I'm asking for advice. If this isn't worth pursuing then I shan't bother.

holly_hobby

No, there are no grounds for you to pursue.

You have said that you preferred a belt and braces approach, and appeart to say that being so cautious you were not sure if such high interest rates would continue (which I read you debatig the benefit of purchasing the low cost endowment over a repayment mge), and assume this comment is because high interest rates also meant that an endowment mortgage was cheaper than an equivilent reapyment (including Interest Only affording max tax benefits under MIRAS, which wasn't abolished until April 2000) - which was one of the reasons that made an endowment mge super attractive at the time to many peeps.

This rather than an nieve 20 yr old as claimed, actually indicates someone who had some financial awareness (which is good !), and although aware there was an alternative mortgage repayment method to Interest Only (ie repayment or your belt and braces approach), was persuaded despite the policy risks, to effect an interst only endowment mge based on costs and/or alleged persuasion of the then boyfriend (later husband) whom was not party to the policy.

Advising the Firm, I would most certainly defend the complaint on the basis of demonstrated awareness and knowledge of risk at point of sale, supported by additional budgetary considerations of the complainant .....

However, a further defence I could use is the fact that you confirm over the last 13 yrs or so you have also recd Red Letters - advising of the possibility of a shortfall to target, and what to do if you felt you were unaware of the investment risks when you pchd the policy.

You had 3 yrs from receipt of your FIRST red letter to complain.

So, as stated earlier, there are 2 arms of defence here for the firm .

1. It appears you were made aware of alternative repayment methods (ie cost comparison etc you touch on), and advised and accepted the policy investment risk of the endowment at point of sale ie I was never really comfortable indicates awareness and understanding of there being a risk to the policy meeting its target sum at maturity.

Further supported by ....

2. Also being timebarred re complaining, in that you had 3 yrs from receipt of your FIRST red letter (advising of the possibility of a shortfall to target sum and what you should do if you felt the investment risks were not explained to you at point of purchase) t complain to the sales firm.

So, no based on the above and what you have said, there really is no where to go on this.

Sorry this will be disappointing I know ..

Hope this helps

Holly xx

artbaron

I had the same thing, taken out in '93. Strongly urged to take an endowment by a financial advisor so being a FTB and in my early 20s I went with that. In the late 90s I received a couple of letters warning of modest shortfall followed by one in 2001 projecting a £19K shortfall - on a 25 year £55K mortgage! I guess the investment was in Sinclair C5s or something. Cashed the endowment there and then and my £36K of payments resulted in an impressive payout of £7K. A complete con like so many investment schemes. If I add up the money I've lost due to following 'professional advice'... doesn't bear thinking about.

holly_hobby

artbaron wrote: »

I had the same thing, taken out in '93. Strongly urged to take an endowment by a financial advisor so being a FTB and in my early 20s I went with that. In the late 90s I received a couple of letters warning of modest shortfall followed by one in 2001 projecting a £19K shortfall - on a 25 year £55K mortgage! I guess the investment was in Sinclair C5s or something. Cashed the endowment there and then and my £36K of payments resulted in an impressive payout of £7K. A complete con like so many investment schemes. If I add up the money I've lost due to following 'professional advice'... doesn't bear thinking about.

So in only 8 yrs (ie 1993 - 2001) you say you paid £36,000 in premiums alone (ie a monthly policy premium £375.00 pm), and this was on a low cost endowment policy, which had a £55,000 target sum/guaranteed death benefit ??

Are you sure these figs are correct ????

Who was the provider ? What type of policy ?

It should be noted that premiums to a low cost endowment combine costings for both life cover (which is deducted first) and the residue (less fees) going to invesment, so the entire premium is never wholly invested.

Hope this helps

Holly

scrumpymummy

Thanks Holly.
I think all this has proven is that I put my trust in the wrong person. Around the time of the first red letter my husband was (please don't laugh!) a financial advisor. I handed everything to him to advise on, and subsequently letters, and was always told not to worry - that it was all scare mongering to make you take out more policies and spend more money. Just as well when he left he took his alcoholism, gambling debts and credit cards with him - which he'd kept wholly secret from me!
Heyho, I'll find a solution somewhere - as long as I've explored that as an avenue.
Thanks

artbaron

holly_hobby wrote: »

So in only 8 yrs (ie 1993 - 2001) you say you paid £36,000 in premiums alone (ie a monthly policy premium £375.00 pm), and this was on a low cost endowment policy, which had a £55,000 target sum/guaranteed death benefit ??

Are you sure these figs are correct ????

Who was the provider ? What type of policy ?

Yep, figures are correct although the total mortgage could have been £57K and not 55, can't remember which now. Monthly payment around the £380 mark. No idea of the provider or policy details as I didn't retain any of the documentation - just glad to be rid of the horrendous thing.