Endowment UK

EdInvestor

Hello Compensationitis

I'd like to ask you a question. I understand that your group is taking Standard Life to court claiming that the company "misrepresented the risks" of selling endowments and other WP products based on these bad Lautro projections from 1988 - 95, and thus it should pay the compensation to people who were missold them, not the IFAs who made the sales.

The following is from the Guardian of May 18, 2002

Buyers of endowments could never hope to achieve the pay-outs promised. However, this is not because of falling stock markets - the excuse peddled by endowment companies - but because the amount the companies took in charges were far higher than they told customers at the time, Jobs & Money research has revealed.

During the period when millions of endowment policies were sold, at the peak of the late 80s property boom, insurance companies routinely projected forward the benefits of the endowments, assuming that only 0.3% a year would be lost in charges. But the real amounts were often four or five times higher. Remarkably, the persistent under-estimation of charges - and over-estimation of future returns - came with the blessing of the industry's regulator at the time, Lautro.

"It was a period of absolute lunacy," says Janet Walford, editor of Money Management magazine, who campaigned against the system until it was abandoned in 1995."The regulators were probably got at by the vested interests in the industry at the time. You absolutely had to stick to the projections.

By the early 90s it was looking mad. We refused to show the standardised projections in the tables in our magazine because 99% of the companies had higher charges than the projected levels."

If the "industry Bible" Money Management, which is read by all IFAs, campaigned about this problem from the early 1990s at the latest, then surely all the IFAs knew about it? And it wasn't the insurers who told the customers the wrong projections, it was the IFAs who sold the products, wasn't it?

If they knew about the fault with the product, why did they sell it?

Just because a provider produces a product doesn't mean an Independent Financial Adviser (IFA) has to sell it, does it? There are thousands of !!!!!! products out there which get left on the shelf.

Yet you're trying to sue an insurance company to force it to pay compensation that IFAs should pay, when you know very well that at Standard Life the policyholders will end up paying the bill, because it's a mutual with no shareholders. :mad:Frankly I suspect that Standard Life members might have a problem seeing you as a crusader for justice to endowment victims.

In any case, IFAs are required to take out insurance against misselling claims from their clients, so what's your problem?

Compensationitis

If providers used the same basis to calculate premiums for a given target amount you would expect them to produce exactly the same figure, would you not? Well they didn't and that's what led us to believe the premium was correct, being slightly trusting of our major players we expected them to be honest, they were not.

Janet Walford was unaware of the detail I have uncovered, she even invited me to write an article for the June edition.

You should ask the idiots at the regulators, the DTI, HM Treasury and GAD who is responsible. They will blame advisers because they don't want to pick up the tab and they don't want UK plc to implode.

No point shouting at me, shout at the Board of Standard Life, they know they were in the wrong and who cares if they spend a few £billion putting matters straight? It isn't just mortgage endowments they messed up, think about all the other duff products.

Compensationitis

OH!

And why didn't anyone take a blind bit of notice of the Guardian back then?

Have a think about it before you answer.

defender_of_the_weak

Me, I'm still looking for a response to the earlier posting

Compensationitis

Dear DOW

I've just spotted your hysterical posting.

Did I say anything about you in particular? If so please point it out so I can apologise, if required.

defender_of_the_weak

I don't know but I think the statement 'Company' in a posting that immediately follows mine stating 'my company' would lead one to infer that it was directed at us. It does not say these companies those companies or anything else. This is a blanket accusation that bears no reality to the truth in many instances.

Please note for information. Many of these companies are backed and funded by your fellow IFAs, will they be drummed out and have their shiny pens snapped by the board of IFA enquiry.

While I'm on, comment re the charging structure etc. IFAs put themselves up as experts and professionals who would find the right policy because they worked for you and not the insurance company. They therefore had a duty of care to investigate the plans they were selling and make sure they did what they said on the tin. But not to worry about that because Standard Life et al have always outperformed projections and everything will be fine. It was simply easier to let the broker rep recommend the product and go along with it.

Once we get past 95 how come these products are still being sold and not performing, the charging issue had been corrected had it not. Answer, IFAs and financial advisers made more money out of endowment based mortgage than repayment.

Mis-sold ? Let the public decide.

EdInvestor

Compensationitis wrote:

No point shouting at me, shout at the Board of Standard Life, they know they were in the wrong and who cares if they spend a few £billion putting matters straight?

Err, I care - and I'm sure the 2.6 million other owners of Standard Life who might have to fork out for misselling compensation that should be paid by IFAs also care.

In any case, IFAs are required to take out insurance against misselling claims from their clients, so what's your problem?

Did the IFAs who are complaining not have any insurance then? Is that why they are no longer in business and trying to sue Standard Life?

IFAs put themselves up as experts and professionals who would find the right policy because they worked for you and not the insurance company. They therefore had a duty of care to investigate the plans they were selling and make sure they did what they said on the tin.

Quite so. This case just adds insult to injury.

Compensationitis

I hate this condescending phrase but in this situation it is apt:

'With all due respect',... which actually means something else altogether, you have no comprehension of what it feels like when you have been conned by a major life office (or two or three or more) so puhleeeze stop whining about being an abused policyholder because SO AM I. And what is worse I SOLD IT TO MYSELF!!!

Do you understand?

scottishlizzie

Are you aware that you sound totally deranged?

Compensationitis

To someone who knows nothing about the subject yes.