Colonial/Winterthur Life Endwmnt - miss-sold by IFA ?

seanh

Hi there,

Can anyone advise on the following for me please.

Back in 1998/99, myself and my wife were advised by an IFA that an endowment was the best way for us to eventually pay off our mortgage of £68k.

Then, only 12 months down the line and to our surprise, we receive an off target letter to which the IFA says that everyone is getting them and not to worry. We then received these annually which prompted me to contact Winterthur.

We complained to Winterthur who said that there was no evidence that the policy was miss-sold and to take it to the Ombudsman if we are still unhappy.

We raised this issue with the ombudsman back in Sept 2005 and i only received a reply once i rang them 20 months down the line.

The summary of the points we raised were that.....

1 We are complaining about the "assurance" and "advice" given by an IFA, whereby he stated we "will" receive upwards of 10% and that the "5% & 7.5%" were just figures used by the financial sector purely for estimates and that he believed were not realistic and will "never happen". The view and words of the IFA was that there "was no risk" for us and that this product would produce a significant profit above the £68,400 borrowed.

[FONT=courier, monaco, monospace, sans-serif]2 If the IFA had a full understanding and confidence in the performance of the stockmarket at the time of the sale of the endowment, then i would say that a fair assumption is that the market was performing at least at the percentage that would pay off the £68,400 in its entirity. If it was underperforming at the time, he certainly did not inform us of this fact of which it clearly was, to receive an "off target" letter only 12 months into the endowment ![/FONT]

[FONT=courier, monaco, monospace, sans-serif]3 Our interview with the IFA was conducted at the home of my inlaws and had just received an endowment payment at the time of our meeting with the IFA. As we were first time buyers, they were party to our conversations with the IFA and can verify his comments regarding the figure that he said that we "would" expect and that we were only interested in taking out this product on the basis that we would make a significant profit above the £68,400.[/FONT]

[FONT=courier, monaco, monospace, sans-serif]In conclusion we would not have taken out this product, if the IFA had not been so adamant that we were not risking a shortfall and that we could not fail to make a significant profit on top of the £68,400 borrowed. As first-time buyers we were naturally cautious, but put our confidence in the cast iron assurances given verbally by the IFA but not upheld in writing.[/FONT]

[FONT=courier, monaco, monospace, sans-serif]Can anyone advise please, as to whether this is worth pursuing as it seems that the Ombudsman is not convinced and have upheld their decision that the policy was not miss-sold.[/FONT]

[FONT=courier, monaco, monospace, sans-serif]Thanks for reading, and if anyone wants any further details that will help in their reply, please feel free to drop a reply.[/FONT]

[FONT=courier, monaco, monospace, sans-serif]Here's hoping.[/FONT]

[FONT=courier, monaco, monospace, sans-serif]Sean[/FONT]

EdInvestor

[FONT=courier, monaco, monospace, sans-serif]Can anyone advise please, as to whether this is worth pursuing as it seems that the Ombudsman is not convinced and have upheld their decision that the policy was not miss-sold.

You can try taking them to court, that's the only route left.But have you made a loss?

Having a mortgage shortfall does not necessarily mean you have suffered a loss.
[/FONT]

JoeK_3

Projections for endowment policies have been changed a number of times based on investment returns and legislation and by the sounds of things your policy was caught in the stock market crash of the year 2000.

During the years of 2000-2003 most endowment policies were showing a shortfall but as investments are improving, so are projections.

It sounds like you have taken all the steps to try for redress and the powers that be have not agreed with the need for it.

What would you like to pursue?

JoeK

dunstonh

98/99 was a great time to start a unit linked endowment with hindsight. You started just before the crash came so you would be buying units at half the price they are now.

Even the best endowments on track for large surpluses would still show shortfalls at this early stage due to nature of the projections. As you get further in to the term, that gap would close.

Have you had the policy reviewed and found out if it really is likely to end in shortfall or not?

seanh

Hi Dunstonh

Apols for the delay in the replying.

When you say have i had the policy reviewed, would this be done by Winterthur Life, as they now hold this policy, or do you get a 3rd party to carry out such a review ?

For your info, our January 2007 "New World Mortgage Plan Annual Statement" reads as follows....

Fund(s)

seanh

Hi Dunstonh

Apols for the delay in the replying.

When you say have i had the policy reviewed, would this be done by Winterthur Life, as they now hold this policy, or do you get a 3rd party to carry out such a review ?

For your info, our January 2007 "New World Mortgage Plan Annual Statement" reads as follows....

Fund(s) WITH-PROFIT B
Total Number of Units 7739.32
Selling Price £1000.00
Value of Units in Fund £7,739.32

Total Value of Units £7,739.32

Do you know if this all that Winterthur would respond with, or are you able to advise further based on this information.
Frankly, it means not a jot to me.

Once again, thank you for your input.

Kind regards,
Sean