Did your Advisor tell you Endowments are risky?

NeilQuinn

!!!!!!_here wrote: »

I was working as an insurance agent from 1982-91 and 'sold' myself an endowment in 1989 prior to buying a property in 1990. There was certainly no question in my mind that it was going to pay off the mortgage, it was just a question of would I get a small or large fortune back on top of that. Who can I sue now ?

Colleague of mine, complained about himself & won! - Go for it.

Crazy_Saver

NeilQuinn wrote: »

Colleague of mine, complained about himself & won! - Go for it.

It's a MAD!, MAD! World!:rotfl:

Brilliant!!

Thanks for that NeilQuinn;)

Crazy_Saver

dunstonh wrote: »

Thankfully, we are all better off because the things that made endowments fall short have made us better off in other areas by amounts far greater than a potential endowment shortfall.

I appreciate what you are saying dunstonh, but with a shortfall of £33k on a £60k mortgage I really don't feel better off in any other area.

Although it seems innevitable. I really wasn't looking to start the mis-sale argument off again I just wanted to hear the other side of the story from the point of view of a consumer who was given the correct advice.

Crazy Saver

Dick_here

NeilQuinn wrote: »

Colleague of mine, complained about himself & won! - Go for it.

Thanks for the reply, I thought I'd been ignored though there was a serious question in there.

There are three points really:

1) Can I claim mis-selling when I was the 'salesman' ? Which sounds silly, but I genuinely believed there was a certainty of a profit on top of the mortgage being paid off.

2) I've had the 'red' warning letter, however current maturities are paying much more than those projections and with mine having only 6 years to go I personally still expect it will pay off the mortgage amount and more. Therefore, is mis-selling an issue at all or does it only apply where there IS actually going to be a shortfall ?

3) Can I claim, as the payout is no longer needed for a mortgage anyway so even if there was a 'shortfall' it will still be a payout to me anyway ?

I really shouldn't have been allowed to sell insurance to anybody else should I...

Dick_here

dunstonh wrote: »

And 25 years of lower repayments than a repayment mortgage as well. Not by a small amount either as you had LAPR tax relief and a good period of MIRAS and possibly double MIRAS.

That is a very good point that people normally overlook when complaining about endowments these days.

Mushy61

silvercar wrote: »

We got our first endowment through a mortgage broker sitting in an estate agents (I know! older and wiser now). He told us the only question would be the size of the surplus we would get after 25 years. This was in 1986, we believed him, why wouldn't we? we were young and he had managed to get us a mortgage that was 2.75 times our joint salary which was then more than most lenders would give, so why wouldn't we trust him.

This is more or less the situation that I encountered in 1987 when I took out my first mortgage with Abbey National.
The adviser gave us a glowing outlook of untold riches at the end of the mortgage term, however, like most endowments it failed to perform and cashed it in last year, changed my mortgage from I/O to repayment then put the cash from the endowment policy in various savings accounts and ISAs more or less guaranteeing 6% growth.
I also complained that I was miss sold the policy and got about £1500 from that.

NeilQuinn

!!!!!!_here wrote: »

Thanks for the reply, I thought I'd been ignored though there was a serious question in there.

There are three points really:

1) Can I claim mis-selling when I was the 'salesman' ? Which sounds silly, but I genuinely believed there was a certainty of a profit on top of the mortgage being paid off.

2) I've had the 'red' warning letter, however current maturities are paying much more than those projections and with mine having only 6 years to go I personally still expect it will pay off the mortgage amount and more. Therefore, is mis-selling an issue at all or does it only apply where there IS actually going to be a shortfall ?

3) Can I claim, as the payout is no longer needed for a mortgage anyway so even if there was a 'shortfall' it will still be a payout to me anyway ?

I really shouldn't have been allowed to sell insurance to anybody else should I...

Well the colleague I'm on about is now the senior compliance manager at a well respected IFA firm and he knows his stuff. Actually I think his mis-selling claim was in respect of transerring his own Final Salary pension into a personal plan. His argument was that he was simply following the Company Mantra at the time.

In the 80's & 90's..any new adviser, especially with an Insurance Company, is beaten around the head into believing all the company's products are fantastic & if they don't sell 'em, they're in trouble.

treliac

If you change from I/O to repayment, the mortgage is extended for so much longer. Should the calculation of redress for mis-selling take into account the fact that much more interest will have to be paid on the loan over the extended life of the mortgage, particularly if the redress is calculated some years after the changeover?

Crazy_Saver

!!!!!!_here wrote: »

Thanks for the reply, I thought I'd been ignored though there was a serious question in there.

There are three points really:

1) Can I claim mis-selling when I was the 'salesman' ? Which sounds silly, but I genuinely believed there was a certainty of a profit on top of the mortgage being paid off.

2) I've had the 'red' warning letter, however current maturities are paying much more than those projections and with mine having only 6 years to go I personally still expect it will pay off the mortgage amount and more. Therefore, is mis-selling an issue at all or does it only apply where there IS actually going to be a shortfall ?

3) Can I claim, as the payout is no longer needed for a mortgage anyway so even if there was a 'shortfall' it will still be a payout to me anyway ?

I really shouldn't have been allowed to sell insurance to anybody else should I...

Hi !!!!!! here.

Just as a matter of interest, why would you want to claim mis-selling if the policy you sold yourself still looks as if it is going to do the job you intended it to?

As far as I can make out, your policy is not only on track to cover the mortgage but you are also expecting a surplus. Isn't that exactly what you wanted in the first place?

Please don't shout at me if I'm wrong, I still don't fully understand the world of endowments;)

EdInvestor

NeilQuinn wrote: »

Actually I think his mis-selling claim was in respect of transerring his own Final Salary pension into a personal plan. His argument was that he was simply following the Company Mantra at the time.

Unlike endowment misselling, pension misselling was the subject of a formal regulatory review and insurers were required to compensate those they had missold.So it may be he didn´t actually make a complaint at all, but was sorted proactively by his employers.