Think You Were Missold Your Endowment Complain Now!!!! [CLOSED]

dunstonh

Thought the ombudsman service would deal with it all????

The ombudsman will only review a complaint and outcome once you have given the advising company the chance to deal with the complaint first.

If you were to send it to the ombudsman first, they would refuse to deal with it and pass it to the advising company for them to review it.

If I was awarded comp then who would pay it??? The IFA who mis sold it me?? If this is the case why are they not all going out of business????

The IFA pays it. Although they (we) have liability insurance which covers the claims. The IFA pays the excess. These are quite high. For example, my excess is £2500 per claim. Its a good incentive to get it right first time

Many IFAs are going out of business. However, IFAs do not account for the majority of upheld complaints and many of us have no problems. For example I have not had one upheld endowment complaint. Many of the IFAs i know are in the same situation. This could be a survival of the fitest event where a lot of the duffers find themselves out of business and no-where to go leaving the better ones still in business. The industry is certainly shrinking.

Geoffrey_Coan

I've been lurking and reading all the posts but don't think I've seen anybody else discussing what to do when the compensation letter comes ....

A few months ago I submitted a claim via Seeing Red for my Friends Provident endowment sold in 1989. Only after I'd put in my claim did I come across Martin's advice but hey I figured that at least I'd have someone pushing it through and I've got enough on my plate anyway.

Cut a long story short they've agreed that I was probably mis-sold as I was sold the policy when I was single (thus didn't need life insurance) and I was financially naive & risk adverse.

They have recommended that:
- I surrender the policy (£19k surrender value)
- they pay compensation of £6,600 to bring me up to the point that I'd be in if I'd been on a repayment mortgage
- I convert my interest only mortgage to repayment

Thoughts ?

I'm personally a bit loath to surrender the policy. I've only got 9 years left to run and although the annual bonus's have been paltry of late I'm still hoping for some form of terminal bonus in 2014.

Question is what to do ?

Take the surrender value or keep on paying £80 per month for the remaining 9 years in the hope that the final value will be higher.
I've been told by the solicitor that I can take the compensation regardless.

Geoffrey

dunstonh

I'm personally a bit loath to surrender the policy. I've only got 9 years left to run and although the annual bonus's have been paltry of late I'm still hoping for some form of terminal bonus in 2014.

You could get an IFA to do a policy review on it. You could post some information on here about the plan for a guidence (although it will not be as thorough or accurate as a policy review).

If the endowment is good and growing well, then you may not want to surrender it. If the endowment is a bad one, then why keep it going?

I've been told by the solicitor that I can take the compensation regardless.

You can. However, you must remember that because you have used a solicitor to handle the claim, the amount of the compensation will be reduced and this will result in your mortgage payments having to be higher

EdInvestor

- I surrender the policy (£19k surrender value)
- they pay compensation of £6,600 to bring me up to the point that I'd be in if I'd been on a repayment mortgage
- I convert my interest only mortgage to repayment

Sounds good, reeduce the mortgage amount by the compo and surrender money and pay the endowment premiums into the mortgage monthly as well.

I'm personally a bit loath to surrender the policy. I've only got 9 years left to run and although the annual bonus's have been paltry of late I'm still hoping for some form of terminal bonus in 2014.

Post some figs if you like but frankly FP is not likely to do much, its WP fund was less than 30% in equities last time I looked.Still you will have had a demutualisation bonus, that will have improved things a bit

jpgaudi_2

I complained to Standard life but they said that I had to complain to the broker selling me the policy. As far as I can find out the broker is no longer in business.

Is there any way to contiinue the complaint?

EdInvestor

jpgaudi wrote:

I complained to Standard life but they said that I had to complain to the broker selling me the policy. As far as I can find out the broker is no longer in business.

Is there any way to contiinue the complaint?

If the sale was after 1988, complain to https://www.fscs.org.uk

If before 1988, there's nothing you can do.

Jo_anne_2

jpgaudi wrote:

I complained to Standard life but they said that I had to complain to the broker selling me the policy. As far as I can find out the broker is no longer in business.

Is there any way to contiinue the complaint?

If the broker was based in an estate agents you could ask them what became of them. I enquired about the broker who sold us an endownment with the EA where he was based, they replied that the agency he worked for was amalgamated into Commercial Union and ultimately Norwich Union so they have passed my enquiry on to them. That's not to say there will be anything forthcoming but at least I know what happened to the broker.

Geoffrey_Coan

EdInvestor wrote:

Sounds good, reduce the mortgage amount by the compo and surrender money and pay the endowment premiums into the mortgage monthly as well.

Post some figs if you like but frankly FP is not likely to do much, its WP fund was less than 30% in equities last time I looked.Still you will have had a demutualisation bonus, that will have improved things a bit

Unfortunately I've just (on 1st Nov) arranged a new discount mortgage scheme with my BS and if I make a capital repayment of more than £500 I have to pay a penalty. I'm already overpaying by £500 per month (in effect I'm trying to pay off the interest only mortgage like a repayment mortgage) so will have to wait until the scheme ends in a year or so before making any repayment from the compensation & cancellation.

In terms of my FP policy:

• It's a Friends Provident Low Cost Homebuyer Plan
• Taken out in 1989 and due to mature in August 2014
• Was oringinally in single name, now joint names with my wife, pays £60k in event of death of either of us (I don't particularly now need this life assurance, have other policies in force)
• Most recent guaranteed value (end '04) was £31k
• Bonus rates have dropped like a stone in recent years, in '02 they were 0.5% & 0.5% (% on guaranteed amount, % on bonus amount), in '03 they were down to 0.25% & 0.25%, then in '04 0% & 0.25%
• I pay £79.93 per month so from now to policy maturity I'll have to pay £8,632 of additional premiums

The way I figure it I'm being offered £19k surrender value but if I wait 9 years and handover the additional £8,632 then even if they cut the bonus's to 0% and pay no terminal bonus I'll get back an additional £12k over the current surrender value. Any additional annual bonus's and the terminal bonus only work further in my favour.

Geoffrey

EdInvestor

Geoffrey

The way I figure it I'm being offered £19k surrender value but if I wait 9 years and handover the additional £8,632 then even if they cut the bonus's to 0% and pay no terminal bonus I'll get back an additional £12k over the current surrender value. Any additional annual bonus's and the terminal bonus only work further in my favour.

On the other hand if you surrendered it now and put the money in the bank@4% also paying in the premiums, you'd be in line for 37.4k, which is an addtional 15k compared with the 12k you've calculated with no risk.If you used it to pay off a mortgage on 6% interest (say) you'd stand to make an equivalent return of an additional 21k.

Can't see much of an argument for keeping it if you don't need the life cover.

Nearly_Broke

To jpgaudie and edinvestor
I tried to complain to the FSCS as the IFA who sold me my policyare no longer trading.

FSCS took over a year to eventually write back to say that though the firm are not trading, the ex-partners could pay the compensation, though the FSCS would provide no information on who the partners were or where they could be found.

I have been told there is no way to force the ex-partners, if found, to investigate any claim and so if they can be found the only option would be court action.

Seems a bit unfair that firms can trade as "regulated" by the FSCS but if the firm stops trading the FSCS ceases to have any responsibility for their actions during the period of regulation and can walk away from the indemnity responsibility.

Would this be worht taking to the ombudsman?