Endowment query - who do I complain to?

Dave_in_Glasgow

Hi everyone,

Newbie here - always enjoy reading the site, never had to post here before though!

I have a query on one of my endowments - I have two, bought for seperate properties, but I sold one and kept the endowment on.

One in particular I'm concerned about. At the time ( Feb 1994 ) the advisor, an IFA, told me that endowments always paid the target value and usually a "nest egg" as the bonus. Now of course that's not the real story. So I wrote and complained to the IFA company, who replied saying that that specific endowment was taken on the express instructions of the Bank who were providing the mortgage for the property.

Nepotistic or what? My question is : who do I now address my complaint to? The original IFA said the lender insisted it was this company, so I assume there will be paperwork for this.

Any suggestions on what I might consider doing?

Many thanks in advance.

dunstonh

The agency the submitted the business is the one responsible. It sounds like the IFA in this case.

However, its best you clarify something here. Did the IFA provide advice or was it bought on execution only? It seems the IFA are saying that they just did what they were told to do and nothing else. However, if advice was given to you, then this is correct and you should go back to the IFA.

The mortgage is one thing, the endowment is another. If the mortgage was already arranged by a bank on interest only basis, then this itself doesn't stop you complaining. Although it wont help your case as the advisor can turn round and say that you had an interest only mortgage and came to them to find out how to repay that interest only mortgage. It depends on the rest of the supporting material as to how that is viewed.

MINMOUSE

I would recommend getting in touch with the company you took the endowment policies with and ask for a copy of the original proposal forms etc, When you get these it should show details of the proposal and sometimes if they were taken out as execution only it will have this written on it (protects the ifa). If it is unclear from these docs whether or not advise was given then send a complaint letter to the ifa or bank etc that sold you the polic stating that you believe the policy was missold. Give them a resonable timescale for a reply and worse comes to worse you can contact the Insurance Ombusman. Good luck

Dave_in_Glasgow

OK, to try to clarify:

The mortgage was arranged prior to the endowment being taken out by some months, so we were playing "catch up".

The IFA explained to me that the endowment he showed me ( on the Bank's recommendation as seemingly they said it could only be from this one provider ) would pay off the target amount and that endowments usually left a decent "nest egg" ( his words, not mine ) so that's why, like so many others, I'm now querying just what I was sold.

I had spoken to the IFA regarding this but he said that since the Bank insisted the endowment came from a specific provider, then they were responsible for the introduction and subsequent dissatisfaction.

Thanks for the advice, I'll request copies of the proposal forms and see what develops.

Scott

Nah, I'd say that the IFA was responsible, he gave the advice and should have advised of the risk.

dunstonh

im inclined to believe that the IFA is responsible.

Banks did used to have a list of acceptable providers but I never recall it being limited to just one. However, that being said, its not a complaint about provider but about it being endowment. Your problem is going to be that you arranged an interest only mortgage (with the intention to be endowment) with the bank prior to getting advice from the IFA. Almost certainly his response is that he was facilitating the purchase of the endowment to match the interest only and that you had chosen that route before seeing him.

There is some responsibility with the IFA still but whether its enough to uphold an endowment complaint, I do not know. Maybe DOTW will be along shortly and post his views.

MINMOUSE

I would still the IFA as well - sounds like they may have been tied agents to the bank in question which is not so common now.

Scott

After thinking about it, it sounds like the IFA may have misled you regarding only being able to take an endowment from one source, as far as I know the lender can recommend an endowment company, but not insist on a particular one.

But that may have been different when you took out your mortgage.

Also, maybe he got a kickback/fee for you getting that particular endowment?

defender_of_the_weak

Sounds like he is trying to kick you in to the long grass with this one. None of the major banks insisted on using a specific provider. I am curious as to who your policy is with as it may shed some further light on your case. Have you checked with the product provider that it was actually the broker who made the sale.

Have you made a formal complaint or was this only an enquiry. If it was a complaint has the broker provided a 'final response' with dates by which you can refer the matter to the Financial Ombudsman Service.

In terms of your case, it may be quite difficult to prove you were mis-sold if you had already arranged an interest only mortgage, this would infer that you were going to use some sort of investment to pay the mortgage off. It is by no means conclusive and is only one fact in consideration of your position, but again if you can shed any further light on the circumstances around your sale it would be helpful

FOSman

Hi Dave. If you are getting no joy with the IFA, call the Financial Ombudsman Service (FOS). As defender has rightly said, it will be hard to show that you were mis-sold this one.

Mortgage advice was not regulated at the time and so you can't complain that you were advised to start an interest only mortgage. In addition, it is very likely that the mortgage was arranged with the intension of starting an endowment.

The FOS will look at the investment advice. Was it suitable to your needs? You had a mortgage, which you might not have been able to change. Therefore, you needed a repayment vehicle.

I wouldn't hold your breath on this one, but I don't know all your circumstances and what evidence there is. Good luck.