Missold Endowment: Implications for advisor?

Loocie

Hi. Anyone know what the implications are for the advisors that missell endowments?

I am going to I initiate a complaint, as I think I was missold a policy, but am uncomfortable in the fact that I still do business with the financial advisor that sold it to me, and wondered if anyone could tell me the implications for him? Is this something I should discuss with him before taking any action?

It wont stop me from proceeding, but will help me decide how to approach things.

MBM

If you think he missold you an endowment, why are you still doing business with him. What is to stop his misselling something else to you?

dunstonh

Hi. Anyone know what the implications are for the advisors that missell endowments?

It can range from nothing to being sacked, having to pay redress from your own pocket or even losing your licence depending on the severity of the complaint and your track record. (Being sacked is basically like losing your licence anyway as most companies wouldnt consider employing someone dismissed for their complaints record).

Is this something I should discuss with him before taking any action?

I would like to think that anyone I deal with would discuss issues they have with me first before putting in a formal complaint that will be on your file and have to declare for the rest of your life. Going straight to complaint isn't fair on the adviser. It's up to you whether you care about that or not.

If you truely thought you were mis-sold then why are you still using the adviser? If you are attempting to get "free money" by jumping on the claims bandwaggon then remember that someone pays for it somewhere down the line.

Loocie

Thanks – just what I needed to know.

The issue of whether to make a complaint or not, has raised many questions for me. I am not on the hunt for free money; I am just trying to ascertain what is right and best for me before I loose the option to complain.

I certainly wouldn’t deal with this person if I felt he had truly miss-lead me. At the time I took out my mortgage, endowments were very ‘en-vogue’. My marriage had just broken down, and as our home had had an endowment mortgage I just went with what I already knew.

Upon reflection I had little understanding about what it really meant for a policy value to go down as well as up. Now that I have to ‘find’ £30,000 (to cover a shortfall) before my mortgage matures, I understand completely. I have changed part of my mortgage to reduce the pressure on the amount the policy has to cover, and am hopeful that in 2010 I will be in a position to change it all to a repayment mortgage for the last seven years.

Like you, I am a professional, and have strong feelings about the manner in which issues of sensitive nature are addressed. I prefer the direct approach but know this isn't always acceptable. I am pleased that you have responded to this question. I will have no hesitation in setting up a meeting to discuss my concerns with my advisor.

You’ve been most helpful.

EdInvestor

What company is the endowment with?Get the IFA to work out the cheapest possible way of getting your mortgage paid off - which will proibably be to surrender (or sell) the policy, use the lump sum to reduce the amount owed and then increase the mortgage payment by the endowment premium, thus overpaying the principal and saving on interest.

If he can work it out so you don't make a loss, then you won't have to complain.

If he presents a reasonable proposal (free) which solves your problem, then perhaps he could be let off the hook.

dunstonh

Getting the IFA to review your endowment is a good idea. Some endowments are not as bad as the projections make out (although some are actually worse).

Sometimes keeping it is best, switching to ISA or going to capital and repayment mortgage. Once the adviser has done an analysis and answered some questions you may have about the nature of the endowment, then you can decide if you wish to pursue it more.

Having an endowment is not a mis-sale. How it was sold is the issue.

Loocie

I really can’t remember a lot of the detail about how the policy was sold to me; I went with what I knew, at a difficult time in my life. I do have some responsibility in this which is why I wanted to know about any repercussions for the IFA.

I’ve already taken some action in an attempt to try and address the shortfall, and will consider what has been posted above.

Thanks all J