Mis Sold Scottish Amicable Policy

Rooster_Norwich · 13 December 2016 at 9:10AM

Back in my youth, 1990 I was serving in the RAF in Germany. We had several "Advisors and brokers" in the Mess all trying to sell their products to the guys serving overseas.

I signed up via a broker for a Scottish Amicable Endowment policy over 25 years. The policy matured and masively underperformed compared to the description and explanation given by the "broker".

Looking back, there were so many things that were simply not explained to me back then ( with no financial experience) and lots of promises made to get me to sign up.

The policy was explained as paying out £50,000 at 18 yrs and a further £50,000 tax free lump sum after 25. In reality I got £38,000.

I even have the hand drawn diagrams the broker made showing this and listing all the points he talked about, no mention of it going up or down, no mention it was investing in stocks etc. Lots of positive points but harldly any negatives. (glad I kept that) I was never given any other options or told about repayment mortgages. The way it was explained, my mortgage would be paid off after 25 years with a lovely lump sum.

The Broker has now sold the business on and the new broker says its not his problem , "I purchased the trading name of Breckland Insurance in 1995, under the terms and conditions of the contract, all liability relating to advice given before the takeover date remains with the previous proprietor Mr XXXXXX. I would therefore suggest you contact him"

Mr XXXXXX lives on a houseboat in Holland now and he sold the business on.

Scottish Amicable were taken over by Prudential, Prudential say that it isnt their problem as it was a Scottish Amicable thing not them.

So where do I stand...????

AnotherJoe · 13 December 2016 at 10:50AM

Many endowments sold in that period "underperformed" but from what I've seen, it was more about over promise than underperform, eg most other similar investments wouldn't have done much better, it was just that the assumptions used were very optimistic.

If you didn't realise that the stock market was involved,well that would have been mentioned as thats at the bottom of all of these, and anyway, to repeat myself, that wasnt the root cause, had you invested in the market in any general fund you'd have done similarily, its just that the projections were unrealistic.

So is not that because you invested in the market you did badly, its that you were told it would do better than was realistic to promise. On the upside, had you not taken this out, you'd probably have just not noticed the extra money. What were you investing each month in this?.

You are also well out of time from any complaint procedure.

If there was a mortgage associated with tis you'd have been getting warning letters for the last 15 years and plenty of time to make alternate plans. If not its a nice lump sum you could have seen wouldnt provide £100k for, again, about 15+ years..

dunstonh · 13 December 2016 at 12:25PM

The Broker has now sold the business on and the new broker says its not his problem , "I purchased the trading name of Breckland Insurance in 1995, under the terms and conditions of the contract, all liability relating to advice given before the takeover date remains with the previous proprietor Mr XXXXXX. I would therefore suggest you contact him"

That is correct where the rights are moved over but the liability remains on the old company.

he policy matured and masively underperformed compared to the description and explanation given by the "broker".

In reality, the policy has not underperformed relative to real world performance. The problem is that investment returns fell significantly after the start of the millennium. We had two major crashes in under 10 years. You only tend to see one of those szie crashes once in a generation. So, getting two so close to each other was historically unusual.

At the same time, the country moved to a low inflation environment and that also hit investment returns (not so much in real terms but against fixed target growth requirements it did).

To put this in context, over the decades we have gone from seeing investments quadruple over 10 years to tripling and now doubling is considered good performance.

Investment returns are always unknown. The economy and investment environment is very different today to what it was when you took this out. The problem here is that you seem to have maintained a 1990s level of expectation. Not sure why as the annual statements would have included valuations and projections that showed a much lower level of maturity was likely. Indeed, the projection rates in the later years often understated the likely outcome.

Rooster_Norwich · 13 December 2016 at 3:16PM

I was just going by the information given to me that many people were mis sold Scottish Amicable policies during this time period and that there was the possibility of some compensation for this.

Looking at the MSE Forum, people have claimed and got something back because of the very same things I mentioned above. But if it's not to be, then c'est la vie I guess.

dunstonh · 13 December 2016 at 4:43PM

Looking at the MSE Forum, people have claimed and got something back because of the very same things I mentioned above. But if it's not to be, then c'est la vie I guess.

Actually, the success rate on endowments was closer to 33% (some more/some less). However, the endowment issue was a long time ago. Over 3/4 of endowments are timebarred from complaint.

Scot Am policies were not too bad. They tended to be 80%+ towards their target figure. They got upto 90%+ before the credit crunch. Then fell back but have been rising againt but I havent seen anything on recent ones as you just dont see much about endowments nowadays.

AnotherJoe · 13 December 2016 at 10:31PM

Rooster_Norwich wrote: »

I was just going by the information given to me that many people were mis sold Scottish Amicable policies during this time period and that there was the possibility of some compensation for this.

Looking at the MSE Forum, people have claimed and got something back because of the very same things I mentioned above. But if it's not to be, then c'est la vie I guess.

I think you'll find all those complaints would have been about endowment mortgages and the successful complainants would have been put into a position equivalent to had they taken out a repayment mortgage.

But you aren't in that position as I read it, it's just a stand alone policy. And you can't really get compensation simply because it didn't grow as much as you thought or indeed were promised. Had you saved as much in cash as in the policy I'd be very surprised if it would have returned anywhere near as much as your policy

swanseajack47 · 17 October 2018 at 12:42PM

We were sold a Scottish Amicable Life Assurance Policy back in Nov 1985 . The amount assured was £9500 and the purpose was to part repay the capital of a 20 year £20000 mortgage. I remember the premiums were £20.66 per month for the 20 year period, so nearly £5000 in premiums. In the event, the policy paid out around £10.100 and thus yielded a small 'profit'. I'm not complaining about that because, at the time, endowment policies were beginning to underperform and, with hindsight, we were lucky that ours did not mature a few years later.

However, I've always wondered if any part of the £20.66 monthly premiums was for PPI? Prudential have since taken over Scottish Amicable's business but, in a phonecall tday, Prudential steadfastly refused to have anything to do with any PPI enquiry.

So how can I follow this up, and would it be a waste of time anyway? Any advice out there? Thanks. Daibach.

dunstonh · 17 October 2018 at 12:48PM

However, I've always wondered if any part of the £20.66 monthly premiums was for PPI?

No.

but, in a phonecall tday, Prudential steadfastly refused to have anything to do with any PPI enquiry.

Of course they did. You cant have PPI on it.

So how can I follow this up, and would it be a waste of time anyway? Any advice out there? Thanks. Daibach.

You give up because there was no PPI.
Your household insruance wont have PPI either. Nor your supermarket shopping or petrol or most other things you spend your money on.

You may from the scam capital of the UK (your name indicating Swansea) but you dont need to that paranoid about these things

Mis Sold Scottish Amicable Policy

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