Can I claim for mis-selling ?

wildey_saver

Hi,

15 years ago when I was 15 I recieved an inheritance of about £4000 from a relative that was actually given to my father. As he had a positive experience with an endownment policy himself he thought he would start up a similar thing for me, to help me on my way to my first house etc.

So he went to see Halifax Financial Services and told them that although I wasn't buying a house he wanted something that he could pay the first few years premiums on in my name and then I could take over. The end aim being to pay off my mortgage when I was 40, i.e. 25 years from the start of policy.

To cut a boring story a bit shorter I have actually got a Versatile Investment Plan (5 policies) with a 25 year term (10 to go). It is not a with profits policy so I'm not sure if it is really an endownment or not. It has a Life Assurance value of £9500. My questions are as such :

Was this the right policy to sell to me (its in my name) for the purpose of an investment to pay off mortgage ?

Why did they sell a 15 / 16 yr old a policy with life assurance as I had no dependants ?

Can I make a claim for mis-selling and if so against whom ?

Ideally I'ld like to have a copy of the notes from the meeting with my father, as I would like to understand why this was sold over any other product.

BTW, and not relevant, it is due to pay out 25,000 based on the middle 6% predictions.

Any help would be really gratefully received.

FOSman

Its a tough one but you need to ask yourself what you are complaining about? If it was a mortgage endowment, then you can argue that there were better ways to invest the money rather than a 'pre-mortgage' endowment.

If its just the life cover, then I wouldn't bother going down that route. At the end of the day, your father would have been the one making the decisions at the time.

You can try and complain and you might be able to get hold of the original paperwork. Contact the life/investment company and get a hold of a copy of your file.

EdInvestor

Hi wildeysaver

Does the paperwork mention anything about mortgages or is it a savings endowment?
Poor performance of an investment is not grounds for complaint.

greenwich

A good place to start looking for information is here: http://www.financial-ombudsman.org.uk/ (click on the link for endowment complaints on the right).

If the Halifax knew that the policy was for you and not your father (presumably they did as it's in your name) then there is no justification for selling life assurance. It's correct to say that you can't complain about poor investment performance as such. Since your dad wanted an endowment policy for you, presumably he can't complain that he should have been sold a risk-free investment. Even if he did have a complaint about that, I think you'll find that many endowments over 15 years have beaten the return on building society accounts, so there may be no loss for which you could get compensation.

dunstonh

Was this the right policy to sell to me (its in my name) for the purpose of an investment to pay off mortgage ?

This type of policy was a common savings plan for that time and there is nothing wrong with that. Indeed, depending on how it was set up, it could still easily be suitable today. i.e. offshore to reduce tax liability and in trust (from father to you)

Was this the right policy to sell to me (its in my name) for the purpose of an investment to pay off mortgage ?

It would be suitable for investment purposes. It would be unsuitable for a mortgage. However, that wasnt what it was being directly used for. Investment goal was to provide a lump sum 25 years down the road to give to you to allow you to repay your mortgage early. As no mortgage would have existed at the time and as it wasnt your father's mortgage, a mortgage endowment would have been a mis-sale. The goal was to pay you the money on maturity. What you decide to do with it then is your choice.

Why did they sell a 15 / 16 yr old a policy with life assurance as I had no dependants ?

Its a life fund investment which always contains an element of life cover. Sometimes tiny, sometimes more. This sounds like a guaranteed sum assured to which the units would be added to.

Can I make a claim for mis-selling and if so against whom ?

On what grounds? Sounds like they have done nothing wrong. If its in trust, then this type of product would almost certainly have to have been used. If its the offshore version, then its tax efficient.

A good place to start looking for information is here: http://www.financial-ombudsman.org.uk/ (click on the link for endowment complaints on the right).

The Versatile Investment Plan is not a mortgage endowment though.
http://customer.friendsprovident.co.uk/common_ss/layouts/consumerSubSectionLayout.jhtml?pageId=consumer%2FSitePageSimple%3Asavings.vip

If the Halifax knew that the policy was for you and not your father (presumably they did as it's in your name) then there is no justification for selling life assurance.

Its not life assurance in the sense you are thinking of though. Its an investment in life funds and the life cover is a by product.

It's correct to say that you can't complain about poor investment performance as such.

We cant say it has performed bad. Some of the funds on this product have done extremely well and are highly regarded. We dont know what funds were used in this case http://www.friendsprovident.co.uk/doclib/xlfe2.pdf

*link currently down. 14 funds available. With Profits, managed, Stewardship managed, Stewardship, UK Equity, European, N America, Pacific Basin, OVerseas Equity, Fixed Interest, Index Linked, Cash, UK Index Tracking

A good spread of those funds and it would have performed very nicely over the period. Given the year it was arranged, I would guess a single fund was used but switching to a spread now is still an option.

There is insufficient information for anyone to say whether it was mis-sold. However, on the limited information posted, I would say no, it wasnt. Chances are its in trust (which would have needed a life fund investment). It could be offshore to reduce the tax, although that is really a secondary issue as the charges would have been higher and the premium may not have justified the tax saved so the onshore version may have been used.

The fund selection is very good and includes low risk funds through to medium/high risk funds. Switching is available.

I suggest a moderator moves this to savings/investment board as this is not a mortgage endowment but a savings plan.

* edit: one of the links is down at the moment so edit made to list a few of then funds available.