Endowment mis-selling question

MDM_2

With all the focus on mis-selling I have a question.

I have an endowment policy which is returning below the expected results. The thing is, I didn't have a mortgage when the policy was taken out! I lived with my mother and we decided that I should put away some of my earnings while I had the chance. After talking to the salesman I ended up with an endowment policy. I don't know why to be honest but I'm wondering if I qualify for compensation.

Anyone know?

Conrad

MDM wrote:

With all the focus on mis-selling I have a question.

I have an endowment policy which is returning below the expected results. The thing is, I didn't have a mortgage when the policy was taken out! I lived with my mother and we decided that I should put away some of my earnings while I had the chance. After talking to the salesman I ended up with an endowment policy. I don't know why to be honest but I'm wondering if I qualify for compensation.

Anyone know?

You will most certainly qualify for compensation. If the company responsible wont play ball, take it to the ombudsman.

This type of selling called 'pre - mortgage endowments' was outlawed a few years back as the consensus view was that there were far more liquid, lower risk savings methods for savings towards a house purchase. Usually a cash savings account is by far the most appropriate way to save for a house.

An endowment is a savings plan that includes life cover. The cost of the life (and any other cover) is deducted from your monthly premiums!! On top of this they have very, very high charges so in my opinion are THE worst savings vehicle. Futhermore you are often far removed from the actual underlying fund management companies and as such you pay not only the insurers / Banks cut put also the underlying fund management companies cut. These muppet investments are promoted on daytime TV by the likes of Carole Smiley & Gloria Honeyford.

Youll get your money back for sure.

dunstonh

Is it a savings endowment or a mortgage endowment?

MDM_2

I'm not sure if it's a savings or mortgage!

I know it states "With profits" so I assume this indicates a savings? I'd have to look at the policy details to confirm.

Does the different type of account impact my entitlement to compensation?

dunstonh

With profits is an investment fund. Its a fund thats available on pensions, endowments, savings, investments and even ISAs.

If it was a mortgage endowment and you didn't have a mortgage, then its likely to be considered a mis-sale. If its a savings endowment, then you are unlikely to have a case as rate of return (or lack of) is not grounds for complaint. The workings of savings endowments and mortgage endowments is usually a little different with savings endowments having less life cover than a mortgage endowment with a greater amount going into the saving side.

MDM_2

Thanks Dunstonh -