Mis-Sold Endowment?! - I need advice please

Woggy67

Help!

Back in 1991 I was sold an Endowment Mortgage. From my understanding it is not with profits. The financial advisor was a friend of the family working for a local firm of brokers. He stated that the Endowment would be enough to pay off my mortgage amount and leave me with some spare cash at the end. At the time I was single and living at home. I had just started to consider the whole investment thing, though I had no other investments and I trusted the advisor implicitly. To add insult to injury my records show that I had just been made redundant from a local firm at the time I was sold the Endowment Mortgage.

As the years rolled by I have received various statements from the provider about the Endowment. I have never had to use the Endowment against a property, so in reality it has just sat there as an investment.

In 2001 I received my first letter from the Endowment provider stating that there may be a possible shortfall. I started to look into the poor performance of my Endowment and what I should do. The man who sold me the Endowment has since set up on his own as an IFA. The firm he worked for changed partners and its name, but to my knowledge there are still people from that original firm still trading, albeit under a new name. With this in mind I was advised that with the original firm now no longer trading (at least under that name) I would need to contact the FSCS. I requested information from the FSCS in August 2003 and in April 2005 I received a letter from FSCS in reply to my complaint explaining that in real terms I was slightly better off than if I had taken out a Repayment Mortgage. Whilst I cannot contest this calculation I have argued the case that this is not the reason for my complaint.

My reason for complaining is that clearly as a young single male, with no property and no immediate desire to own a property, I was sold a very expensive Endowment Mortgage, which acted as nothing more than a very poor savings plan with life cover. When I found out the charges and how little was invested in the early years, compared to how much commission was paid to the financial advisor, I was shocked to say the least. I explained all this to the FSCS and that I had been mis-sold, but they stated that there was nothing they could do other than follow their procedures which related to a calculation of potential losses only. To me this is even more straight forward than someone sold the wrong mortgage. Upon reflection this investment was just not suitable for my needs or circumstances. Sadly though the FSCS do not seem to see it that way.

During all this I have continued to pay the monthly premiums and in seeking advice from another IFA about what I should do now, I have basically been told that I should just cut my losses and cash the Endowment in. I am now really confused as to what I should do.

My question is therefore can I still pursue the mis-sold element even if the FSCS reply calculation states that I am no worse off compared to a Repayment Mortgage? In my opinion falling 17k short of the mortgage amount and the fact that I could have had the money invested elsewhere, providing a better return is key to this. I was never told that the Mortgage could under perform, only that it would make more money than the original mortgage amount.

Any help, advice and guidance gratefully received, even if it is to say forget it, sell it and move on.

Thanks.

toonfish

how can you be "worse off than a repayment mortgage" when you didn't even have a mortgage? All you bought was a savings plan.

Poor investment returns are not a valid reason for complaint

EdInvestor

During all this I have continued to pay the monthly premiums and in seeking advice from another IFA about what I should do now, I have basically been told that I should just cut my losses and cash the Endowment in. I am now really confused as to what I should do.

Not quite sure why.The advice seems quite clear - cash it in. Your complaint appears to have been successful, but the fact is that although you might have got better returns elsewhere,you didn't make a loss.Hence no redress is payable. Poor performance itself is not grounds for complaint.

Time to move on.

Woggy67

Many thanks for your reply.

I fully understand where you are coming from. That said it still feels very strange to think that the Financial Advisor/family friend could have sold me something far more appropriate like a PEP/TESSA, and I guess that was my gripe and reason for asking about being mis-sold.

I will now move on and sell the Endowment as advised.

Thanks

Woggy67