Execution only endowment

glastowinebar

I posted on another thread that my claim for a mis - sold policy was chucked out by the Ombudsman because my ex wife used to work for the Halifax and she got the policy on an Execution basis, so they say there was no advice given. Another poster has said that they also worked for the Halifax, had an execution only endowment and they were successful in their claim

Has anyone else out there had an execution only policy? If so how did you get on with your claim?

mystic_trev

I would imagine anyone taking an 'Execution only' has to take the responsibility in these situations. I assume most of the commision was refunded to your wife at the time, or knocked off the premiums?

glastowinebar

I'm not sure to be honest. When we divorced I carried on with the policy and it wasn't until SL told me about the shortfall and after I claimed, that I had even heard of an execution only endowment

oh well the claims lost now.

dunstonh

Like most IFAs, I do a number of execution only cases each year. Its fairly common as people tell you what they want and expect to get the product cheaper either in the form of lower charges or a commission rebate.

The rebate/lower charges are given as there is reduced consumer protection as you are not giving any advice and the choice of the product is down to the individual and not the adviser. Therefore it removes the ability for a complaint to be upheld. The only proviso is that the case is correctly documented as execution only.

If you read my response on that thread you mention you would have noticed that the adviser in question in your case has documented it correctly from how you explain it and you are getting the right response. The other case where it was upheld appears to not be documented correctly. Not an uncommon thing when it comes to banks/building socs.

dunstonh

http://www.financial-ombudsman.org.uk/publications/ombudsman-news/14/feb-recent-cases.htm
Look at 14/14 and you will see how the FOS view these.

glastowinebar

Thanks for that dunstonh

DoshSaver

I worked for a bank which also provided mortgage facilities (i.e. they provided the loan) which I took. In addition, they also provided access to an insurer that provided endowments. When we were deciding which to go with repayment or endowment I presumed the information given was informal advice as it was arranged through the channels of our administration/personnel departments.
It was only when we received our “red” letter warning of a short fall 10 years later that I checked our documentation properly and noted a commission fee given by the insurance company to my employer that we then found out they were recognised as an IFA.
On that basis we were outraged that it had cost us over £700 (buried deep at the back of the documentation we signed) for the privilege of my employer being “helpful” and lumbering us with a potential £18k shortfall on a £60k mortgage.
Whether this was supposed to have been an “Execution” only mortgage or what ever I never found out but the organisation my employer used to handle such claims found in my favour and awarded £4k (presumably as the commission fee had been paid to my employer).

Perhaps one way to find out is to read your documentation and see if a fee was paid as commission to your employer.

dunstonh

...and noted a commission fee given by the insurance company to my employer that we then found out they were recognised as an IFA....

...but the organisation my employer used to handle such claims found in my favour and awarded £4k

That process doesnt sound like an IFA. Sounds more like a tied representative. In which case many of these were not allowed to do execution only or had sales targets which only included advice sales. Many put them through as advice even though technically they didnt get any. Something that has come back and bitten them on the backside.

Perhaps one way to find out is to read your documentation and see if a fee was paid as commission to your employer.

Doesnt matter if commission is paid or not or if it was rebated or not. There is a required process for execution only since 1991. If the process was followed then it will not be upheld. If the process was not followed then it could be upheld.