endowment mis-selling--- i give in

foxyuk

sold policy in 1986 by dunfermline building society they adv me that the legal and general policy sold was an ifa within dunfermline building society

after 5 weeks l & g have advised it was a company called wimpey insurance services insurance brokers

not on fsa list , called fsa - nothing called ombudsman but they WILL NOT DEAL pre 1988............. looks like they no longer exist!!!


what a farce

Compensationitis

Wimpey still exist.

dunstonh

foxyuk wrote:

sold policy in 1986 by dunfermline building society they adv me that the legal and general policy sold was an ifa within dunfermline building society

after 5 weeks l & g have advised it was a company called wimpey insurance services insurance brokers

not on fsa list , called fsa - nothing called ombudsman but they WILL NOT DEAL pre 1988............. looks like they no longer exist!!!


what a farce

You are looking at how it was back then. No regulation and many arrangements were done on a local basis and not controlled by bank/building society itself.

Out of interest, how is the 1986 policy doing? Is there really a shortfall or is it just showing a shortfall on the projection letter but really has got enough behind the scenes?

Compensationitis

Dunston

I deal with consumers on a regular basis, they look at the 4% (or lower) reprojected shortfall figure and think that's the compensation they will receive, last year the FOS told 13,000 people to go away and take what the adviser offered in compo.

The ambulance chasers tell everyone the 'average' compo is something worth going for and when the claimant finds out they have not suffered a loss or it is in four figures they get the hump.

foxyuk

wimpey where are they then??????

showing at mo on summary statement sent- inception 1/7/1986 - £42 p/month
matures 1/7/2011
sum assured - 25000
bonus attaching 7624
gross surrender- £15600

dunstonh

last year the FOS told 13,000 people to go away and take what the adviser offered in compo.

That is such a waste of money for all concerned. The IFA/provider getting another £350 cost for going through the FOS, the policyholder for having to wait and in the meantime still paying interest on mortgage chunk that would have been paid off.

There is a misconception that people are going to get the shortfall covered. That has been apparant with posts made here in the past.

EdInvestor

dunstonh wrote:

There is a misconception that people are going to get the shortfall covered. That has been apparant with posts made here in the past.

IMHO it's not an easy problem to resolve.The compo/redress figure is based on surrendering the endowment, using the proceeds plus the compo money to reduce the value of the mortgage and increasing the monthly mortgage payment by the amount of the endowment premium.

However, some people would definitely lose money if they surrendered their endowment, and others might lose out.It's difficult for even IFAs to judge because of unclear information from providers - and the fact is nobodu can foretell the future, the projections are meaningless.

It wouldn't be appropriate to issue a blanket instruction to surrender all endowments with a shortfall - that might fall into the department of unintended consequences ;)But it seems silly not to explain the basis of the figures to the policyholders - who are just left sitting there, not knowing what to do, while the shortfall may be growing.

If advisers aren't explaining this, they don't deserve much sympathy IMHO.How much trail commission would they be giving up on a surrender after all these years?

Compensationitis

What is the connection between 'trail commission' and the mess we find ourselves in?

On £30 per month the renewal commission would be 75 pence, the client can ask as many daft questions as he/she likes for the princely sum of 75 pence so why would any adviser worry about losing that princely sum and letting the poor policyholder get out of their predicament?

There is so much misinformation going around, we need to calm it all down somehow, trouble is there are so many vested interests in keeping this gravy train going, we have the media (sells advertising space and 'consumer' magazines), the regulator (the more trouble they make, the more jobs they create), the FOS (on a bonus for each case touched) and let's not forget the ambulance chasers who earn up to 50% of the redress. Oh, don't forget the life offices who offload so many liabilities when people surrender, they also keep a lot of the value because the contract ends mid term with a penalty, AND they get to keep the 'orphan assets' that actually belong to all the policyholders they robbed over the decades past.

Rant over, bet I make you think! If I don't you must be dead...

EdInvestor

What is the connection between 'trail commission' and the mess we find ourselves in?

Just one possible factor...

...trouble is there are so many vested interests in keeping this gravy train going, we have the media (sells advertising space and 'consumer' magazines), the regulator (the more trouble they make, the more jobs they create), the FOS (on a bonus for each case touched) and let's not forget the ambulance chasers who earn up to 50% of the redress.

Oh, don't forget the life offices who offload so many liabilities when people surrender, they also keep a lot of the value because the contract ends mid term with a penalty, AND they get to keep the 'orphan assets' that actually belong to all the policyholders they robbed over the decades past.

On the media front, it's less likely to be advertising related than editorial story related IMHO: you only have to look at this site to see that endowment shortfalls are a major issue for readers.

Otherwise I agree, though frankly there aren't too many of those orphan assets left now, are there?Actual figures on the surrender/liabilities reduction vs value of inforce business are a bit thin on the ground too.

And there's obviously value in them thar zombies, isn't there?.....;)

Compensationitis

I'm being very serious here, this is no laughing matter because the whole thing could come tumbling down.

On the media front, in many cases the editorial is controlled by the people who advertise on their pages, no adverts = no income, think about it.

Thankfully the Daily Mail ran a good article on ambulance chasers last Wednesday and they received some nasty telephone calls and NO advertising from ambulance chasers so perhaps the usual garbage that paper throws out that is based upon one particualr journo's contacts with the ambulance chasers has been brought under control. Everyone can be bought for a price, some are cheaper than others. If you think otherwise you are naive in the extreme, or else you are one of the cheapies.

Them thar Zombies as you describe them are still alive, they are you and me, they are your parents, they are OWED!

WE are OWED!

Do you like being taken for a ride?

dunstonh

IMHO it's not an easy problem to resolve.The compo/redress figure is based on surrendering the endowment, using the proceeds plus the compo money to reduce the value of the mortgage and increasing the monthly mortgage payment by the amount of the endowment premium.

However, some people would definitely lose money if they surrendered their endowment, and others might lose out.It's difficult for even IFAs to judge because of unclear information from providers - and the fact is nobodu can foretell the future, the projections are meaningless.

If someone complains that the endowment mortgage risks were not explained to them and they then win that complaint, they should have no benefit from the endowment policy if it has performed better and would be worth hanging on to. You cannot have it both ways.

They are complaining that they should be on a repayment mortgage. If the outcome puts them into a repayment mortgage and where they would have been had they been on it from the start, then the endowment itself is a non-issue. They are where they said they should of been and that should be the end of it.