Help Needed - Financial Ombudsman Useless

RehanSaeed

Hi Thanks for reading,

I've been complaining on behalf of my dad for his Endowment Mortgage which is now in a shortfall (After talking to my dad and looking on website it inspired me to complain).
The company I am complaining about is 'B.W. Financial Planning Services'. They no longer operate and are now owned by Norwich Union. This is what I've done so far:

1) Complained to 'B.W. Financial Planning Services' twice but no reply.
2) Spoke to Norwich Union but they referred me to 'B.W. Financial Planning Services' and said it wasn't their problem.
3) Tried the Financial Services Compensation Scheme after following advice from Norwich Union but this was useless as the company still existed so this was a dead end.
4) Complained to the Financial Ombudsman Service and they say they cannot help but I'm really confused and angry, as they are the last resort and the whole point of this organisation is to help people like my dad out. In the letter they wrote to me there is a whole load of legal babble. Here is a copy:

".....As part of my assessment, I have considered whether your case falls within the jurisdiction of the FOS. The outcome is detailed below, but this only concerns my view on jurisdiction and does not relate to the merits of your complaint.
When assessing whether a case falls within our jurisdiction, we take into account the following:

* A firms regulatory body at the time a policy was sold.
* Any changes to a firms regulation which could affect our jurisdiction to deal with a complaint made against it.

I should explain that whilst the FOS acquired its powers on 1 Dec 2001, we can investigate complaints that took place before this date. In order to do so, the event must have fallen within the jurisdiction of the predecessor ombudsman scheme. In this case the PIAOB (Personal Investment Authority Ombudsman Bureau).

The firm would have been subject to the jurisdiction of the PIAOB immediately before 1 Dec 2001 if it was at the time, or had ever been, authorised by the PIA (Personal investment authority). However our records indicate that this was never the case.

Instead, you were advised to start your endowment policy in 1988 by 'B.W. Financial Planning Services', which was regulated to carry out investment business by FIMBRA (Financial Intermediaries, Managers, Brokers Regulatory Association). As a result, I am sorry to tell you that your complaint does not fall within our jurisdiction
........Blah Blah.......
I hope you find the above explanation helpful [Yeah right]......Blah Blah....."

So what I would like to know is who's jurisdiction does this fall into, I thought the FOS was my last hope. They took several months to come up with this conclusion and I know there is a deadline. Am I really screwed?


Thanks in advance for any replies,

Rehan

dunstonh

2) Spoke to Norwich Union but they referred me to 'B.W. Financial Planning Services' and said it wasn't their problem.

That is correct. The provider is not responsible for the advice. One day they just got an application in the post and processed it as instructed. At no point did they offer any advice.

They no longer operate and are now owned by Norwich Union.

What makes you think that? I'm not aware of NU buying any IFA firms.

3) Tried the Financial Services Compensation Scheme after following advice from Norwich Union but this was useless as the company still existed so this was a dead end.

If the company exist, then they are not in default and the FSCS doesnt apply.

So what I would like to know is who's jurisdiction does this fall into, I thought the FOS was my last hope. They took several months to come up with this conclusion and I know there is a deadline. Am I really screwed?

It doesnt come under any juridstiction. It was sold pre-regulation and by a FIMBRA firm not a PIA firm. So, its end of the road.

On, the upside, it is NU endowment and they are typically not bad with a good number heading for target or surplus. Even if projections say otherwise. Mainly as NU plans do not include terminal bonus accrued to date in the projection and do not include the mortgage promise value. Plus, NU bonuses are typically quite good and have seen positive improvement over the last few years.

EdInvestor

Post some figures about the endowment so we can see if there's anything else that can be done.

Guaranteed sum assured
Declared bonuses
Surrender value (ring up and ask)
Monthly premium
Maturity date
maturity forecasts

Interest rate on Dad's mortgage

RehanSaeed

I just don't understand if someone lied to my dad by saying they would get a lump sum on top of paying off their mortgage how they can get away with that. Why doesn't it come under any jurisdiction? I have supplied the figures as requested, except for the sum assured which I'll get hold of but they are figures from February and your saying that things might not be all that bad?

As of February

Target amount - £[FONT=&quot]53000
Monthly contributions - £110
Start Date - 4 Jan 1098
Maturity Date - 4 Jan 2014

Assuming investments grow at 4%
Shortfall - £16300

[/FONT][FONT=&quot]Assuming investments grow at 6%
Shortfall - £11200

[/FONT][FONT=&quot]Assuming investments grow at 8%
Shortfall - £3700

Total regular Bonus £10745[/FONT]

dunstonh

I just don't understand if someone lied to my dad by saying they would get a lump sum on top of paying off their mortgage how they can get away with that.

He still might. It hasn't got to maturity yet and those figures suggest it could still hit target.

Why doesn't it come under any jurisdiction?

Caveat Emptor - buyer beware. The documentation your father was issued would have contained the warnings had he chosen to read them.

As it is an NU endowment, the figures mean nothing without knowing the current terminal bonus and mortgage promise value. These are important as the endowment isn't far off track without them and could well be on track or in surplus with them.

EdInvestor

What's needed is a surrender value.Get your father to ring up NU and ask for this figure.Also please post the interest rate on his mortgage.

He may be better off to sell* or surrender the endowment using the lump sum to reduce the mortgage loan amountnow, and then increasing the mortgage payment by the amount of the endowment premium, thus overpaying the mortgage every month.

This should reduce the shortfall substantially even if it doesn't get rid of it completely.

Even if you could get a compensation amount for misselling, it would not cover the shortfall, which comes as a surprise to many people of course .

*Once you have all the info, you can also submit the details to this website and see if anyone will offer more for the policy than NU.

www.apmm.org

RehanSaeed

Hi,

I managed to find time to get the surrender value, it is £24,800. The interest rate is 6.75%. How much more do these other companies give and what should I do next.

1) Complain some more, through another avenue.
2) Switch to another mortgage by surrendering this one.
3) My dad has recently has a heart bypass and I'm keen for him to get early retirement as he is approaching retirement age in about eight years. If he retires he'll get about £15-20 thousand and there is a possibility of me helping to pay off the mortgage.

Thanks in advance for the advice, you have all been very helpful.

Rehan

margaretclare

Hi, can I offer a little input. I'm not an expert like the responders you've had already.
It sounds to me as if the advice your Dad received originally was from a mortgage broker or maybe an IFA and they have gone out of business since. Sounds like it, from the name - 'B.W. Financial Planning Services'. Anyone could set up calling themselves something like that, set up in business, and businesses fail every day of the week, as many as set up from new go down the tubes and are never heard of again.

As you've been told, the application would have been sent on to NU and they simply processed it as directed.
Endowment mortgages used to be 'flavour of the month' 20 years ago or so - they are no longer sold at all AFAIK. Very many people have discovered in recent years that the amount that was projected to pay off their mortgage will no longer do so because the growth or profits has not been what was expected. The mortgage lender has to inform the mortgage holder of this in order to give him/her time to take action, save more in other directions, whatever.

Maybe remortgaging to get a better deal might be the answer? But it sounds as if you ain't gonna get anywhere with BW Financial Services - the old saying about blood being impossible to get from a stone, springs to mind.

HTH

Margaret

RehanSaeed

Thanks for your reply Margaret, I suspect that you are right. I just find it hard to believe that crooks like this can get away with things like this. It just goes to show that the financial institutions of this country are trying to bleed us dry and that sites like this are one of the few places where we may be able to get back at them.