Mis-sold or am I just pi$$ed off?
Discussion
Well I'm sure this has raised its ugly head on the forums before but...18 years ago the Co-op sold me an endowment. My daughter was 3 months old and my wife and I decided we would put aside some money so that when she reached 17 we could buy her a half decent car to start learning to drive. The salesman sold us an endowment and we clearly remember him insisting this was the best way of making some decent money. It was 1995 and perhaps this was the case back then when the country was doing well.
Last year when we were expecting the payout it transpired he had set it up over 18 years and not 17, so no car for the kiddie. Though we were really annoyed at this, we clearly didn't notice it at the time of signing. We assumed, like so many other non financially minded people, that he'd got it right. So here we are at the end of the 18th year and The Co-op have sent us a letter informing us of what we've earnt from it. £7000 invested and a grand total of £88 interest earned!
We felt guided by the rep and we did what he said was the best thing. Though we received annual updates, we never really understood the implications and just let things take their course. I'd now like to know how much money The Co-op and the rep have made from our investment because back then interest rates were sky high and someone must have made something but it wasn't us!
So, due to our ignorance of all things financial, were we mis sold in your opinion and whether 'yes' or 'no', can we do anything about it?
Last year when we were expecting the payout it transpired he had set it up over 18 years and not 17, so no car for the kiddie. Though we were really annoyed at this, we clearly didn't notice it at the time of signing. We assumed, like so many other non financially minded people, that he'd got it right. So here we are at the end of the 18th year and The Co-op have sent us a letter informing us of what we've earnt from it. £7000 invested and a grand total of £88 interest earned!
We felt guided by the rep and we did what he said was the best thing. Though we received annual updates, we never really understood the implications and just let things take their course. I'd now like to know how much money The Co-op and the rep have made from our investment because back then interest rates were sky high and someone must have made something but it wasn't us!
So, due to our ignorance of all things financial, were we mis sold in your opinion and whether 'yes' or 'no', can we do anything about it?
Probably; as with anything from the financial services industry.
http://www.which.co.uk/consumer-rights/action/how-...
http://www.which.co.uk/consumer-rights/action/how-...
It's certainly a poor investment, but it's impossible to say whether you were mis sold it or not, without knowing what the salesman did or did not say to you at the time.
It sounds like your mistake was just trusting the salesman to get it right. Some financial institutions have seriously misled people, but there are also a lot of people out there who simply didn't bother to read what they were getting themselves into and do the proper due diligence. There is a danger with all these mis-selling scandals that we start to remove the responsibility from people when they sign these things, it's a worrying trend in our society generally.
It sounds like your mistake was just trusting the salesman to get it right. Some financial institutions have seriously misled people, but there are also a lot of people out there who simply didn't bother to read what they were getting themselves into and do the proper due diligence. There is a danger with all these mis-selling scandals that we start to remove the responsibility from people when they sign these things, it's a worrying trend in our society generally.
Was the endowment taken out to pay off a mortgage? Looking at your post it appears not. Do you have all the original paperwork?
I was also sold an endowment to go alongside my interest only mortgage, when I moved home I switched to a repayment mortgage but kept the endowment going as an investment. When I complained about 'mis-selling', to the company and eventually the Financial Ombudsman, I did not receive any compensation as my mortgage was no longer at any risk as I was not relying on the endowment to pay it off.
I was also sold an endowment to go alongside my interest only mortgage, when I moved home I switched to a repayment mortgage but kept the endowment going as an investment. When I complained about 'mis-selling', to the company and eventually the Financial Ombudsman, I did not receive any compensation as my mortgage was no longer at any risk as I was not relying on the endowment to pay it off.
Edited by megaphone on Tuesday 26th February 10:01
Edited by megaphone on Tuesday 26th February 10:02
[quote=megaphone]Was the endowment taken out to pay off a mortgage? Looking at your post it appears not. Do you have all the original paperwork?
No, this is why I question it really. The idea from day one was to put money aside every month so that over the 17 year period it would grow and accumulate interest to pay for the car. As I recall at the time, nearly all financial advisers were pushing these things and now we find out how they lined their own pockets.
I could have simply put my money into the building society and got a far better return.
No, this is why I question it really. The idea from day one was to put money aside every month so that over the 17 year period it would grow and accumulate interest to pay for the car. As I recall at the time, nearly all financial advisers were pushing these things and now we find out how they lined their own pockets.
I could have simply put my money into the building society and got a far better return.
I would definitely write to the Co-op and ask them to explain why the investment has been so poor, ask them to confirm what charges have been levied and what commission the salesman earned. Was there a terminal bonus added at the end of the term?
The publicity surrounding endowment mis-selling was huge around 10 years ago, have a Google and see if there is any info relating to your position.
The publicity surrounding endowment mis-selling was huge around 10 years ago, have a Google and see if there is any info relating to your position.
i doubt in those days they had very much more than a one page fact find and as appointed reps, best advice is a grey area as they acted for the CIS and just sold their products. If that is all they had that fitted your needs then it could be deemed as suitable. would have been better with an ISA (PEP then) but I'd be surprised if they had one for regular contributions at low levels, which although wrong, sort of gets them out of it!
these endowment saving plans were still being sold by the bucketload, when you took it out was probably the tail end of the high inflation/high return policies where the maturity values looked very impressive. Since then it's turned to s
t for most of the with profits funds as they disinvested from stocks into bonds and gilts; crystalising the losses they made in dot com etc.
CIS will argue that you also benefitted from the life cover built into the endowment sum assured, not that this would have been very much or the real purpose of the policy. If you can come up with any argument that you were guaranteed certain returns I doubt they have records to dispute this and might offer a sum to get shot of you!
in answer to your thread title, probably more pissed off than misold due to their regulatory set up as tied rather than independent; doesn't make it right though. It was this sort of thing that led me to go IFA years ago after a few years in the tied market.
these endowment saving plans were still being sold by the bucketload, when you took it out was probably the tail end of the high inflation/high return policies where the maturity values looked very impressive. Since then it's turned to s
t for most of the with profits funds as they disinvested from stocks into bonds and gilts; crystalising the losses they made in dot com etc.CIS will argue that you also benefitted from the life cover built into the endowment sum assured, not that this would have been very much or the real purpose of the policy. If you can come up with any argument that you were guaranteed certain returns I doubt they have records to dispute this and might offer a sum to get shot of you!
in answer to your thread title, probably more pissed off than misold due to their regulatory set up as tied rather than independent; doesn't make it right though. It was this sort of thing that led me to go IFA years ago after a few years in the tied market.
Edited by westberks on Thursday 28th February 21:21
westberks said:
i doubt in those days they had very much more than a one page fact find and as appointed reps, best advice is a grey area as they acted for the CIS and just sold their products. If that is all they had that fitted your needs then it could be deemed as suitable. would have been better with an ISA (PEP then) but I'd be surprised if they had one for regular contributions at low levels, which although wrong, sort of gets them out of it!
these endowment saving plans were still being sold by the bucketload, when you took it out was probably the tail end of the high inflation/high return policies where the maturity values looked very impressive. Since then it's turned to st for most of the with profits funds as they disinvested from stocks into bonds and gilts; crystalising the losses they made in dot com etc.
CIS will argue that you also benefitted from the life cover built into the endowment sum assured, not that this would have been very much or the real purpose of the policy. If you can come up with any argument that you were guaranteed certain returns I doubt they have records to dispute this and might offer a sum to get shot of you!
in answer to your thread title, probably more pissed off than misold due to their regulatory set up as tied rather than independent; doesn't make it right though. It was this sort of thing that led me to go IFA years ago after a few years in the tied market.
I agree with much of what you've said, in particular:these endowment saving plans were still being sold by the bucketload, when you took it out was probably the tail end of the high inflation/high return policies where the maturity values looked very impressive. Since then it's turned to s
t for most of the with profits funds as they disinvested from stocks into bonds and gilts; crystalising the losses they made in dot com etc.CIS will argue that you also benefitted from the life cover built into the endowment sum assured, not that this would have been very much or the real purpose of the policy. If you can come up with any argument that you were guaranteed certain returns I doubt they have records to dispute this and might offer a sum to get shot of you!
in answer to your thread title, probably more pissed off than misold due to their regulatory set up as tied rather than independent; doesn't make it right though. It was this sort of thing that led me to go IFA years ago after a few years in the tied market.
Edited by westberks on Thursday 28th February 21:21
- regular savings through a PEP would probably have been a better bet than an endowment as the life cover wasn't required
- it is not clear that the product was with-profits or unit-linked, but the simple fact that with the benefit of hindsight a building society account would have been a better bet is most certainly not evidence of mis-selling
Sidicks
sidicks said:
I agree with much of what you've said, in particular:
- regular savings through a PEP would probably have been a better bet than an endowment as the life cover wasn't required
- it is not clear that the product was with-profits or unit-linked, but the simple fact that with the benefit of hindsight a building society account would have been a better bet is most certainly not evidence of mis-selling
Sidicks
With a three month old child you cannot dismiss that life assurance was not required. I accept an endowment policy an expensive way to arrange life assurance but 'if' he had no life cover (perhaps he had) a little is better than none.- regular savings through a PEP would probably have been a better bet than an endowment as the life cover wasn't required
- it is not clear that the product was with-profits or unit-linked, but the simple fact that with the benefit of hindsight a building society account would have been a better bet is most certainly not evidence of mis-selling
Sidicks
Also, as for his statement the adviser was 'lining his own pocket' perhaps he should have gone to Equitable Life where the advisers were not paid commission - but then again perhaps not !!!
Some more interesting contributions to my thread guys, thank you. Thinking back, the life assurance bit wasn't essential at all (and here's the embarrassing bit) as I already had ANOTHER endowment against my mortgage with life assurance. This policy I eventually sold up and claimed against. Perhaps that's my justification for mis selling? Why would I want life assurance twice?
What was the guranteed minimum return? If its £7k and you were putting in £30plm you've got your money back plus a bit extra. I do agree that given the length of this policy (normally they are 10yrs) that is very poor indeed.
I've just had one mature at £40plm for 10yrs. £5,200 in and returned a £1k profit. The good days on these have gone. Had plenty that paid out in the 90s when I got double my money back.
Despite my wife wanting me to cash them in (I have one paying out every year for the next 7yrs) dropping the cash comes in handy.
Prudential should be dropping me a nice 'wedge' later this year on a 25yr endowment mortgage that I scrapped years ago but kept the policy running. Already got £1,300 from them some years back claiming mis-sold by the 'agent' who sold me my first place and then sold me the mortgage. He who dares................
I've just had one mature at £40plm for 10yrs. £5,200 in and returned a £1k profit. The good days on these have gone. Had plenty that paid out in the 90s when I got double my money back.
Despite my wife wanting me to cash them in (I have one paying out every year for the next 7yrs) dropping the cash comes in handy.
Prudential should be dropping me a nice 'wedge' later this year on a 25yr endowment mortgage that I scrapped years ago but kept the policy running. Already got £1,300 from them some years back claiming mis-sold by the 'agent' who sold me my first place and then sold me the mortgage. He who dares................
Edited by Zingari on Sunday 3rd March 16:25
Ok, first things first. Do you believe you we're mis-sold or are you just disappointed with the performance of the investment. There's a big difference, but these things do tend to get blurred.
If the latter, you almost certainly do not have a claim. If you believe you we're mis-sold, why? Is it just the issue with the term? Unless you signed an application form stating 17 years and they set it up wrong, then I would suggest any complaint would be rejected.
Do you think the policy was unsuitable or were the risks associated with the endowment not explained?
If the latter, you almost certainly do not have a claim. If you believe you we're mis-sold, why? Is it just the issue with the term? Unless you signed an application form stating 17 years and they set it up wrong, then I would suggest any complaint would be rejected.
Do you think the policy was unsuitable or were the risks associated with the endowment not explained?
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