Mis-sold pension - probate question

shewolfroar

Hi there my Dad passed away in December. In sorting his estate we believe he was badly advised by financial advisor to not take protection given there was a plan sold by the pension company for very little cost. I have a couple of questions, a) is there a standard first letter template/format that should be sent to the company in question and b) if we pursue this and there is a possibility of an income from negligence does it hold up probate or would the FA company issue payment to the beneficiaries? thanks, first post, not much financial nouse so be kind!

Linton

What evidence do you have of what your father wanted from his annuity and what the advisor suggested? If your father wanted to maximise his income whilst alive not paying for protection of some form makes perfect sense especially if he felt his duty to his family was covered by his other assets. Unless you have good evidence I suggest you forget the idea.



Any complaint should be made to the Advisor. It is nothing to do with the pension company, assuming the advisor was an independant and not an agent of the pension company.

HappyHarry

shewolfroar wrote: »

Hi there my Dad passed away in December. In sorting his estate we believe he was badly advised by financial advisor to not take protection given there was a plan sold by the pension company for very little cost. I have a couple of questions, a) is there a standard first letter template/format that should be sent to the company in question and b) if we pursue this and there is a possibility of an income from negligence does it hold up probate or would the FA company issue payment to the beneficiaries? thanks, first post, not much financial nouse so be kind!

Just to clarify, when the adviser advised your father not to take out protection, what reasons did they give?

dunstonh

we believe he was badly advised by financial advisor to not take protection given there was a plan sold by the pension company for very little cost.

What protection are you referring to?

The only bolts for personal pensions were life assurance and waiver of premium. Waiver of premium doesn't pay out on death and pension term assurance has been obsolete for nearly 20 years.

Seeing as it can't be waiver of premium that you are referring to (which is the add on that used to cost a few pound). It must be life assurance.

Pension term assurance was originally introduced as a way to allow people without occupational pensions to bolt on life assurance to give them something similar to an occupational pension. However, the Govt killed it off by changing the rules making it impossible to offer.

Most pension providers never offered a pension term assurance policy. It was never a requirement for a financial adviser to offer it. Also, pension term assurance was medically underwritten and priced like a normal term assurance. So, premiums were not cheap unless you happened to be in your 20s or early 30s.

You may also wish to clarify if you are referring to a pension or an annuity or other pension related product. you are getting responses that refer to pensions and to annuities. Your post isnt clear what you are referring to. Annuities dont have protection addons. So, I have taken the approach that when you say pension, you mean pension and not annuity.

What does it say in the report about the pension?

Owain_Moneysaver

What actual loss did your father or the estate suffer because he didn't take out protection?

Usually mis-selling claims are based on unnecessary protection being sold, and the loss is the cost of the unnecessary policy.

Aegis

Presumably this is some sort of protection or guarantee period on an annuity? If so, the tradeoff would have been a lower income for life, which may not have been what your dad wanted. Impossible to say without seeing the recommendation reasons though.

xylophone

In sorting his estate we believe he was badly advised by financial advisor to not take protection given there was a plan sold by the pension company for very little cost.

Your father contributed to a pension with an insurer?

The insurer also offered a life policy of some description which would have paid out on his death?

Your father was advised not to take out life insurance?

Dox

shewolfroar wrote: »

if we pursue this and there is a possibility of an income from negligence does it hold up probate or would the FA company issue payment to the beneficiaries?

Others have responded to the first part of your question but I don't think this part has been dealt with.

Executors normally have 3 years from the date of death to start a claim if they believe the deceased (sorry, horrible terminology, especially as you are so newly bereaved) received poor/unsuitable investment advice. Much depends on what/how any compensation if due (and it's a big 'if', certainly not a given) is paid - it may fall outside the estate, so be a red herring so far as probate is concerned.

Without knowing more about what you think was mis-sold, it's impossible to know.

shewolfroar

Thanks for the replies.

I have obtained more details from my partner.

Dad had two pension pots, at retirement he received illustrations on annuity purchase and drawdown options.

He chose/was advised to take an annuity with the 25% cash lump sum.

Dad was ill. Chronic and acute conditions plus the medication to go with it. I can see in communications that some of this was mentioned and i assume that medical forms would have been completed as part of the process. He also mentions that he would like to be able to 'pass on' something if he died prematurely.

There is no mention or advice (in the communications or illustrations we are privy to) that a 'guaranteed period' or 'value protection' add-on product would be worth considering. This appears a no-brainer to me?

We are aware of the process...ie complaint to the adviser in the first instance....then the pension ombudsmen.... then a pension lawyer if need be.

Malthusian

shewolfroar wrote: »

He also mentions that he would like to be able to 'pass on' something if he died prematurely.

Playing devil's advocate, that doesn't in itself mean the advice was unsuitable, because it could have been followed by a conversation that went "I would like to be able to pass on something if I die prematurely." "OK, but this will mean a lower starting income." "In that case never mind, I'd prefer the higher income as my children will inherit enough anyway." But you'd expect that to be documented.

Do you have the "suitability letter" which outlines the basis for recommending the annuity? If it doesn't mention value protection or guarantees that's concerning. Does it confirm that the adviser provided your father's medical details to the insurance companies when obtaining quotes?

Have you tried a friendly email to the adviser along the lines of "We're concerned that no provision seems to have been made against my father's premature death even though he said he wanted to be able to pass on something, can you explain why?"

We are aware of the process...ie complaint to the adviser in the first instance....then the pension ombudsmen.... then a pension lawyer if need be.

If the Pension Ombudsman rules against you then you really should forget it instead of throwing money away on a lawyer. But that's a long way off.

dunstonh

He chose/was advised to take an annuity with the 25% cash lump sum.

Which was it? Do he choose or was he advised?

If he bought on a non-advised basis then no advice was given and therefore you cannot complain about advice.

Dad was ill. Chronic and acute conditions plus the medication to go with it. I can see in communications that some of this was mentioned and i assume that medical forms would have been completed as part of the process. He also mentions that he would like to be able to 'pass on' something if he died prematurely.

So was an enhanced annuity bought?
What death benefits were chosen to be included?
Was this before or after 2015? (important as pre 2015, it would be unlikely drawdown would have been considered suitable. The FCA didnt expect it to be used on sub £100k funds).

There is no mention or advice (in the communications or illustrations we are privy to) that a 'guaranteed period' or 'value protection' add-on product would be worth considering. This appears a no-brainer to me?

Value protect was only available via a couple of providers. Most didnt offer it. The guarantee was limited to 10 at most pre 2015 and changed over the years. There was a period where it was not available.

Value protect would also significantly reduce the level of income payable.

If an adviser was used, was it an IFA or an FA? (important as FAs can only offer products within their available range. So, if no product existed with Value protect in their range then they could not offer it).

Was this a face to face process or via the internet? (important as most of the internet based ones are non-advised information only)

What does the suitability report say (issued if an advised sale but not if is a non-advised sale)?