Endowments
#5
My father put forward a case of miss-selling... basically without his knowledge one of the three endowments he has on his house purchase finishes seven years after his retirement date.. His contention was that the sales rep changed the date on the policy after he went though it with my father...
The evidence he produced was bank statements showing that he had enough disposable income to pay the full premium for an endowment that finished at the same time as the others. ie it wasn't his attempt to be cheap going for the longer term... The company initially rejected this but under arbitration topped his policy up to the value it would have been if he'd been paying the higher amount and he is now paying the higher premium.
The evidence he produced was bank statements showing that he had enough disposable income to pay the full premium for an endowment that finished at the same time as the others. ie it wasn't his attempt to be cheap going for the longer term... The company initially rejected this but under arbitration topped his policy up to the value it would have been if he'd been paying the higher amount and he is now paying the higher premium.
#6
Col
When were you sold the policy? If it was after 1995 the rules were tightened up considerably and you should have been sent a "Reason Why" letter. This would have listed your personal circumstances, objectives, the recommendation made by the salesman, and why it was the most appropriate policy for you. If you've got this letter then you can check out the details, if not, get a copy from the company who sold you a policy (they have to be retained for a minimum of 7 years).
If you bought the policy prior to 1995 but after 1987 then request a copy of the "Fact Find" that the salesman would have completed on you. Under the data protection act they have to send you a copy for a nominal fee. Again this will list your circumstances and why the recommendation was made. Depending on the company involved, you may or may not have been asked to sign this as accurate at the time, but don't worry, the signature will mean nothing!
If you bought the policy prior to 1987 then you are fugged and will have to rely on the goodwill of the insurance company.
Good luck.
Duncan
PS I know about this due to having worked in IT compliance systems for the past 10 years.
When were you sold the policy? If it was after 1995 the rules were tightened up considerably and you should have been sent a "Reason Why" letter. This would have listed your personal circumstances, objectives, the recommendation made by the salesman, and why it was the most appropriate policy for you. If you've got this letter then you can check out the details, if not, get a copy from the company who sold you a policy (they have to be retained for a minimum of 7 years).
If you bought the policy prior to 1995 but after 1987 then request a copy of the "Fact Find" that the salesman would have completed on you. Under the data protection act they have to send you a copy for a nominal fee. Again this will list your circumstances and why the recommendation was made. Depending on the company involved, you may or may not have been asked to sign this as accurate at the time, but don't worry, the signature will mean nothing!
If you bought the policy prior to 1987 then you are fugged and will have to rely on the goodwill of the insurance company.
Good luck.
Duncan
PS I know about this due to having worked in IT compliance systems for the past 10 years.
#7
As above, they are obliged to do a full financial investigation to make sure it's the right thing for you. If any of these steps have been missed out, or glossed over, there could be a case to answer IMHO.
I am not a lawyer, but almost got suckered into an endowment mortgage last year. The chap was telling me that growth is 7.25% and will only get better. Why didn't the markets follow his advice . He didn't look into my financial history or my complete risk adverseness when it comes to paying for the house. Just wanted his commission. *******.
I spoke with another advisor about this who was utterly shocked at the behaviour.
So there's still turkeys out there. And yes, they are liable for their bad advice.
I am not a lawyer, but almost got suckered into an endowment mortgage last year. The chap was telling me that growth is 7.25% and will only get better. Why didn't the markets follow his advice . He didn't look into my financial history or my complete risk adverseness when it comes to paying for the house. Just wanted his commission. *******.
I spoke with another advisor about this who was utterly shocked at the behaviour.
So there's still turkeys out there. And yes, they are liable for their bad advice.
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After my initial claim for miss-selling was refused by my endowment company I then complained to the "Financial Ombudsmen Service" which is probably standard practice.
They then arbitrate for you, I was lucky and won, it did take about a year though from start to finish.
You will have to answer several questionnaires this will form the basis of your evidence, in my case I argued that the risks had not been properly explained.
Allan
They then arbitrate for you, I was lucky and won, it did take about a year though from start to finish.
You will have to answer several questionnaires this will form the basis of your evidence, in my case I argued that the risks had not been properly explained.
Allan
#13
no your not cause you will see years of growth where you will get more than 7.25%
otherwise why is it that ppl with endowments maturing now are seeing avarage returns of 10-11% plus when they were invested in years that werent all good?
T
otherwise why is it that ppl with endowments maturing now are seeing avarage returns of 10-11% plus when they were invested in years that werent all good?
T
#14
Tiggs
Investment returns over the past 20+ years were indeed very good, but that was an unusual period. Investment returns were unusually high, as was inflation. According to a study by BZW (the Merchant Bank side of Barclays and one of the countrys' largest stockbrockers) equities have typically outstripped inflation by 7% pa, property by 1.5% and deposits by only 0.5%. All of these figures were gross, and hence ignored tax and investment charges. For a mixed fund (like a lot of endowments) the average returns after tax and charges came down to about 2.5% over inflation, so in todays low inflation environment achieving a 7.5% return is difficult.
There are more flexible and tax efficient alternatives to endowments that should be considered. If people don't know for themselves, follow either the advice sheets from the FSA or find a reputable adviser.
Duncan
Investment returns over the past 20+ years were indeed very good, but that was an unusual period. Investment returns were unusually high, as was inflation. According to a study by BZW (the Merchant Bank side of Barclays and one of the countrys' largest stockbrockers) equities have typically outstripped inflation by 7% pa, property by 1.5% and deposits by only 0.5%. All of these figures were gross, and hence ignored tax and investment charges. For a mixed fund (like a lot of endowments) the average returns after tax and charges came down to about 2.5% over inflation, so in todays low inflation environment achieving a 7.5% return is difficult.
There are more flexible and tax efficient alternatives to endowments that should be considered. If people don't know for themselves, follow either the advice sheets from the FSA or find a reputable adviser.
Duncan
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Thanks everyone for the help.The problem I have is that,every 12-18 months I checked to see how it was doing,each time I was told fine no problems,then about 1 month ago they dropped a bombshell ,that they estimate it will be 15% short,after 10 years of a 15 year plan this is very worrying,when I asked if they could give any help or advice they said no,also conviently they have no record of conversations that have taken place.They have now sent a questionaire asking if I have been misold the policy?It should be interesting filling it in!
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