Endowment Mis-selling - Don't give up!

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  • Poppy9
    Poppy9 Posts: 18,833 Forumite
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    So far my ISA ok. I pay in £100 per month to the following funds:

    Aberdeen Sterling Bond
    INVESCO perp corp Bond acc
    Fidelity Special Situations
    Artemis ABN AMRO High Inc

    started 3 years ago and currently valued at more than I have paid in.

    I decided to commit to it for another 2 years - my IFA advised going for a min of 5 years to get benefit but I have the option to cash in at any time. Hopefully I have bought low and if there is a big rise I will be a winner.
    :) ~Laugh and the world laughs with you, weep and you weep alone.~:)
  • payless
    payless Posts: 6,957 Forumite
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    by paying in monthly you benefit from "pound cost averaging"

    basically in early years - if you intend to continue with payments it potentially reduces the risk compared with a lump sum investment ( unless it just continues to fall all the time)

    Interesting fund choice/ split, but thats another story - already off original topic
    Any posts on here are for information and discussion purposes only and shouldn't be seen as (financial) advice.
  • payless
    payless Posts: 6,957 Forumite
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    and I have the original letter showing that the endowment mortgage repayments were more expensive than repayment -

    Might have been then - but not always the case in the years to date
    Any posts on here are for information and discussion purposes only and shouldn't be seen as (financial) advice.
  • Poppy9
    Poppy9 Posts: 18,833 Forumite
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    Quote:and I have the original letter showing that the endowment mortgage repayments were more expensive than repayment -



    Might have been then - but not always the case in the years to date

    Payless - my point was that we didn't choose the endowment because we thought it was a cheaper option we chose because it was sold to us as the best option. Usual story it's worth paying that little extra!!!
    Interesting fund choice/ split, but thats another story - already off original topic

    Oh go on do tell - using the word 'Interesting' implies bad choice!!!
    :) ~Laugh and the world laughs with you, weep and you weep alone.~:)
  • payless
    payless Posts: 6,957 Forumite
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    endowment- I am not going to defend someone else, but if you were explained and understood the risks correctly- on balance , at that time it might have been the option with better potential.

    ISA - not saying bad - likely well a researched complex fund construction, just surprised mix for the level of contribution- is that £100 each or £100 across all funds.
    What sort of charges are being applied?
    Any posts on here are for information and discussion purposes only and shouldn't be seen as (financial) advice.
  • Poppy9
    Poppy9 Posts: 18,833 Forumite
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    Just £25 in each. Actually picked the funds myself from safe to medium risk list provided by my IFA who knows I have an opinion on everything!!

    Charges:

    initial commission £3 for each £100 direct debit subscription

    servicing comission .500% +vat per year of the value of investment.

    new statement due soon. Value @ 1.4 £300 more than I paid in over previous 2.5 years.

    With regard to my endowments. I was definetely misold the first time being young naive and my only dabbling with investment at this stage was premium bonds and a bs account. I actually took on the endowment a year before I bought a house as the advisor told me this would shorten my mortgage term when I eventually bought. At no time was I informed there was a risk it would not pay off my mortgage. I am a cautious person and would have gone the repayment route if there was even the smallest doubt. Given that the repayment mortgage was the lower cost of the two it might have even been feasable to have had the repayment mortgage with an endowment along side for life cover and savings.
    :) ~Laugh and the world laughs with you, weep and you weep alone.~:)
  • payless
    payless Posts: 6,957 Forumite
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    Yeak Poppy

    I said
    if you were explained and understood the risks correctly

    and from what you say, that was not the case

    --

    IMO 3% seems fair for advised investment ( albeit you did some work)

    0.5% annual is a great deal , as most funds charge 1- 1.5% , or are you saying you are paying this on top!

    ---
    As I said off topic and not my thing professionally - just interested personally, so not expecting answer
    Any posts on here are for information and discussion purposes only and shouldn't be seen as (financial) advice.
  • dunstonh
    dunstonh Posts: 116,387 Forumite
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    I thought it was a strange mix too when i saw it. Nothing wrong with it but its a case of having funds at the two extremes of risk. Normally you expect a spread over the range. Nothing wrong with it, just unusual.

    Having a fund as risky as fidelity special situations that you chose, would have worked against you in an endowment claim as it suggests you do know something about risk.
    I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.
  • King_Pugwash
    King_Pugwash Posts: 20 Forumite
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    For anyone ou there thinking they haven't yet complained because it seems like a load of hassle....

    I complained via Which Endowment Action website (http://www.which.net/endowmentaction/index.html) which basically writes a complaint letter for you after you have answered a few questions. It also provides useful and practical advice.

    After completing a few more questionnaires from the lender, etc. my complaint was upheld and I was compensated for the shortfall.

    Give it a go, it's easier than you think, costs you a bit of time and a few postage stamps!
  • payless
    payless Posts: 6,957 Forumite
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    I was compensated for the shortfall.

    No , compensated if given bad advice, not for the shortfall.
    Any posts on here are for information and discussion purposes only and shouldn't be seen as (financial) advice.
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