The Halifax, the IFA & a missold endowment

harpo1

Its a sorry tale of innocence ...
We bought our first house with a mortgage from the Halifax in Oct 1987. At the time the Halifax insisted on life cover & we had to use restricted list of preferred suppliers ie Provident Mutual.
They set the meeting in the Halifax's offices & we arranged an endowment with the usual predictions based I think on 8/ 10 /12 % growth & the advice that for a few quid more we'd have a nest egg.
We always believed that the Provident Mutual was owned by the Halifax
Time passes .... Norwich union buys PM & the first warning letter arrives this year - & our endowment will underperform by 8k.
We ask for compo only to be told that the Halifax didn't sell us the policy , but it was an Independent Financial Consultant working out of their offices. And if we have a claim take it up with him as the Halifax & NU have no liability for the actions of an independent. This news has completely floored us, what with this chap meeting us in their office & the meeting being set up by the Halifax, we assumed he was part of their organisation.
Has anybody else had this round around & what do you advise - apart from a large G & T

dunstonh

At the time the Halifax insisted on life cover & we had to use restricted list of preferred suppliers ie Provident Mutual.

This was very common at that time. I wasnt a financial advisor in those days but dealt with the lending side and lenders had to inspect the policies documents on those days and would refuse certain providers.

Norwich union buys PM & the first warning letter arrives this year - & our endowment will underperform by 8k.

Is this certainly the first letter? To go from no shortfall to 8k in one year, and in a year when things have improved is, in my opinion, unlikely. Did NU have the correct address in the past? Small point. You endowment will not underperform by 8k. It may underperform by 8k. It could be more, it could be less.

This news has completely floored us, what with this chap meeting us in their office & the meeting being set up by the Halifax, we assumed he was part of their organisation.

That was how it was in those days. Associations between companies and individuals didnt need to be disclosed. Often a branch manager would have arranged for a local IFA to deal with their business and would share the income. Today, full disclosure is required where income is paid to introducers etc.

Has anybody else had this round around & what do you advise - apart from a large G & T

Being prior to 1988 and an IFA, I suggest a very very large G&T.

As it happens, you may not have done too badly out of having the endowment (over the long term). You would have spent much of the time having lower monthly payments than a repayment mortgage and you would have had demutualization bonuses. If you have sufficient years left, we may have turned the corner now and see an improvement. You may have sufficient time where budgeting for a potential 8k shortfall is not much of a burden. The NU endowment may not have included the terminal bonus in the shortfall calculation so it may not be as bad as that either. (trying to think of some positives ).

FOSman

Halifax IFA may have voluntary jurisdiction. This can be checked by the FOS, or a direct complaint.